The latest data indicates that the total cost will be something like 30-50 Billion out of the 700 billion authorized. Yet the tea party continues to savage those who voted for it. Several politicians including a couple of prominent Republicans have lost their primaries in part due to their votes for the bank bailout.

Many economist believe the bailout - which was brought to us the by Bush administration averted a complete financial collapse. The Chamber of Commerce which was initially in favor of the bailout, now is opposed, so are politicians from both parties. So now, with the gift of hindsight, do you think Bush did the right thing?

Well as AIG has my IRA .... yep

After that though you need to look up on how many foreclosed homes the banks have AND the number they are carrying without full payments that do not meet interest or 20% down bit due to depressed values.

Bottom line is it is a time bomb that one hope slowly fades because if those units all hit the market at once all hell breaks loose. Many will just bail on mortgages and go for a different place at the reduced market value. ( already going on in FL ) Bad for us and the banks books and balance sheets go upside down.

So bailout, OK whatever. Those millions of overvalued assets the banks have repoed and are setting on / hiding could do us all under.

If the bailout was supposed to relieve the bank's worry, so they could continue loaning.........well, doesn't look like it worked very well, did it?
Now if the money had been held back and allotted slowly to keep the banks just afloat, and the remainder sent directly to the people, then the money would still be in circulation instead of hoarded by the banks, no?
As it is, I don't feel very stimulated.....what about you?

Banker here.

We get to appraise homes in our troubled loan portfolios every 6-9 months, so the appraisers are doing well. We pay for that, not the clients.

We are lending money daily. Do not fall into the trap set by the media. The quality borrowers have no issue borrowing money for owner occupied real estate, equipment, etc.

PM sent

First, I think saying "it didn't work" is meaningless -- we really don't know if it did or did not save us from disaster...

What we do know factually is that it cost us vastly less than the worst case forecasters (and present day shrill voices) would have you believe.

If I have a particular issue, it's that there was not sufficient punitive measures incorporated. CEOs/Bank Officers of bailed out banks should have been PERSONALLY FINED -- say their last 2 years salaries+bonuses and/or put into prison for a year.

I also believe we went SOFT on the regulation of Wall Street -- in retrospect I believe we'll view that as a missed opportunity to have something good come out of the collapse.

So if you fine the bankers, are you going to fine the developers who failed to meet the deadline and sales projections on their projects as well? Are you going to fine Geithner for giving AIG their money so the investors behind them didn't have to take a haircut on their investments? Don't just demonize bankers, there is plenty of fault to go around. Mortgage brokers committing fraud, developers over leveraging themselves.

Do not confuse investment banks with commercial banks. Two entirely different animals.

Many banks have repaid their TARP funds, for which the US made 5%. We didn't take any TARP funds.

Some of the new regulations make sense, other regulations actually are more of a burden to the consumers than the banks.

Overall consequences and cost are yet to be determined.

DF brings up a great point about AIG counterparties. This was a ripoff of serious magnitude when you follow the money.

Would that punishment also include BJ Barney Frank & Crooked Chris Dodd, and all of the Fannie and Freddie bankers, oh, and all the Clintonistas that pushed Fannie & Freddie into crazy No Qualified loans????? Just want to make sure all the Political Responsible Bases are cover.

Ah now the Clinton bit. The two F's ran amuck due to lack of oversite and Mr. Cris & Barney coupled with some other crap. Now this was all well intended as the goal was to get people homes............just kinda got lost that they had to pay mortgages off. But Clinton's? Long gone guy. Even the R's and GB paraded out more Americans owing homes than ever before.

The greed was at all levels with all incomes. 500k LV homes that were built with no intention of living in but to sell and roll out on. Same in AZ so.............B&H have things to hang on them, but this ain't one.

When I participate in these discussions, I can't help but wonder why the personal accountability of the borrowers never comes up. I understand that ours has long been a culture of spending beyond our means, but when the purchase involves the roof over one's head, one should be slightly more prudent in his decision making, IMO.

Did you ever consider HOW the banks were able to pay off these TARP funds so quickly?

If the economy is so slow, interest rates are historically low, and people can't get loans, then how are banks so flush?

Is this another case of "meet the new boss........same as the old boss"?

Did the bank bailouts work? Who knows? You'd have to NOT bail them out and see where the chips fell to know. Saying otherwsie is labeling yourself as way smarter than you really are.

There is something to be said about that, of that there is no doubt.

Although consider this; if a kindergarden teacher leaves their classroom unattended and upon their departure leaves the room full of pixie sticks and Coca Cola, who do you blame when they come back an hour later and the room is completely destroyed? The teacher,........ or the kids?

The thing about demand is that in some instances it can remain constant. People always want stuff. When diving into the problem of credit expansion shouldn't the finger be pointed at those who provided the Schnoppster for the punch bowl?

SW + 1

The banks had no business loaning money to those who clearly could not pay. They would never have done so had they intended to keep the loans themselves. They knew they were writing very risky loans and didn’t care because they saw a way to bundle and sell the bad loans and make a quick buck. Every manager that ordered his staff to ignore prudent income and collateral requirements should be fired. They ignored the basic principles that stood banks in good stead for centuries. The investment banks almost destroyed our economy, caused the loss of millions of jobs and ruined countless retirement accounts. They should pay a heavy price for that. Many Americans do not believe they paid enough or learned their lesson.

I find it incomprehensible that many politicians now want to roll back the new financial reform regulations. It’s clear that liaise faire did not work.

I don't disagree with you entirely; I just think that experienced, life-hardened adults SHOULD be more capable of restraint than innocent, fun-loving children.

I didn't absolve the banks of all the responsibility, after all.

I absolutely agree with everything you said here, except that I think the people who took on those irresponsible loans should shoulder their share of the blame. I know a lot of those folks bought with no intention of seeing the mortgage through; they just wanted a quick flip so they could use their bogus equity to buy another house with conventional financing. That, as I understand it, is speculation, which is risky, to say the least, and when risky choices betray us, we have none but ourselves to blame. Minus the speculation, figuring out how much you can pay on a mortgage doesn't require anything more advanced than subtraction.

As for the laissez faire - it pisses me off as much as anyone. I hated the bailouts, in no small part because of the "too big to fail" language that was used to justify them. In my opinion, if a business becomes too big to fail, that is precisely why it must fail. In the absence of competition, free markets fail. The only thing worse than the bailouts themselves is that no lessons have been learned in the process. Another, much worse recession will be coming in another 50-60 years (assuming we do eventually pull out of this one, of course).

Some of us appraiser's are doing ok. Many others have left the profession due to the new regs that severely hamper/limit ones ability to effectively market themselves to prospective clients. The appraiser's have had to move to a volume business these days as fees have dropped 25 to 40% for residential appraisals due to the new regulatory guidelines. However, borrowers aren't getting any appraisal fee reductions.

Many of the banks that have repaid their TARP funds didn't need them, they took them as a hedge. When things leveled out, they had excess capital, so they paid off their commitment.

Othe banks did stock offerings and used this capital to pay of their TARP debt.

We never made one of these option ARM loans. We saw them for what they were, a ticking time bomb. The large national banks started them, then packaged them and sold them, and forgot about them.

Yes, the consumers who got caught up in "flip that house" have a lot of responsibility in this mess as well.

Of all of the development projects out there, I can think of only a few that are actually doing fairly well. Seabrook in Pacific Beach, of all places, is doing well with 40 homes sold this year.

This topic hits close to home. Literally.

Andy, sending you a pm.

DBAppraiser, I am sending you one too.

I'll disagree with your conclusion Dave based on the presumption that we operated in a laissez-faire market in the first place. Nothing could be further from the truth. Laissez faire is the enemy of the monopolistic banking houses that created the mess in the first place. They do everything in their power to consolodate their industry and eliminate competition, not the other way around.

The problem of the recent credit expansion is complicated and consists of many layers. Holding mid-level underwriting managers accountable for loan programs they have no say over isn't going to solve anything. Go back to my comments about who provided the Schnoppster for the punchbowl. Where did the money come from that allowed the investment banks to create billion dollar 30-day warehouse lines of credit for the originators? It certainly didn't come out of investment house capital, those guys are way too smart for that. So smart in fact that they made all their money on the predicted and inevitable collapse by investing in synthetic CDO's. No, why risk your money when you can risk someone else's? Say like, the taxpayer's.

First look at the repeal of Glass-Steagall that allowed investment banks to borrow from the Fed discount window. I won't even add the conflicts of interest the repeal created for investment banking clients. Then take into account that these investment banks could borrow billions at the discount window during this time frame for what? 0.25% - 1.25%? Throw in some CRIA requirements for Fannie and Freddie to securitize some low income mortgages, and VIOLA! A credit expansion problem is born.

So where did the money come from? From the Fed of course. Is it any wonder that the Fed ended up buying up all these toxic sercurities? They provided all the funding for them in the first place.

It irks me to no end to hear people say this was a failure of the free market. They said the same thing during the Depression and we ended up with policies that perpetuated the problem for another 15+ years, and world war after that. Now we are headed in the same direction and I fear we will learn nothing from our history.

A free market has rules and laws that must be followed and adhered to. What you refer to is anarchy. What happened is gov't legalized fraud, and then turned the other way when it happened. The Fed, the SEC, the ratings agencies, and the investment banks should take the lion's share of the blame. The gov't is complicit in that it has allowed the banks to own it's processes lock, stock, and barrell. Look no further than the appointments by the executive branch over the last 60yrs into the Treasury and Fed Reserve.

We are going in the wrong direction now. This "recession" will be played out over the next decade because we refuse to accept the consequences of our actions. There is no recovery without a little pain. The longer we prolong the misery, the more pain we are going to feel. No amount of Pollyannaism is going to change that.