Yes the bailout didn't work. Of course it wouldn't work but a certain few have control of billions of dollars to keep their friends and selves safe and secure. Don't mistake that.
I think your a little premature on that one.
There are two important things to consider.
No.1 is that these things take time. This crash is the result of decades of bad management. It didn't crash overnight and any fix will not be instantly visible over night. You should be thinking on a timescale of months and years not days and weeks. Changes in the economy take a long time to work through.
It may well turn out not to work, but it is far too early to call it
N0.2 is getting a good idea of what it was intended and expected to do. The purpose of the bailout was not to "fix the economy" but to stop further banks collapsingand reinvigorate interbank lending. As far as I'm aware no banks have collapsed since the announcement of the bailout.
The scope of it's remit is rather more limited than total economic about turn. There are no miracle cures here today.
It is important to remember that the purpose of this bailout was to shore up a collapsing banking system, not to save the poor, not to restore social justice and not to make money for either the tax payer or the bankers.
There are other laws and government agendas to promote this sort of thing in the plenty. The bailout is not designed to address these issues. It is solely for the purpose of shoring up a banking system in crisis.
Yes, there are more economic problems on the current table than just the banking crisis, this bailout does not address them all, but only one specific area of them. Banking. There may be other things that need fixing, but that does not detract from the fact that the banking system is a critical area of the economy that does also.
Given the the state of the economy being able to save the banking system is no mean trick and trying to throw in man's age old and unresolvable political issues into the equation is a mistake. Why make the extremely difficult, deliberately impossible?
With regards to still being able to get car loans at the dealer, this is a good sign, not a bad sign. This is a sign that the banking system has not collapsed. That is is working.
You can hardly blame the banking bailout for working banks....... Or can you?
Ultimately the bailouts don't cure the problem but they alleviate the symptoms. They give the doctor time to treat the patient rather than it just dying first.
Make no mistake, it helps. America has bought itself more time to stave off depression, it might not succeed, but then again, it might.
Time will tell and you can't be blamed for trying.
Originally posted by declaredemer No One Listens to Me Borrow from the Saudis but invest in the American people and build the groundwork for long-term economic growth. ... There is at least 14 TRILLION dollars of capital in offshore accounts that needs to COME BACK to the USA to invest in America, build America, and create American jobs. ... Buying bad assets to keep irresponsible banks and insurers afloat is not going to work; they need to be bottom-out and get devalued, and the private sector will buy it. ... If good money does not go to creating jobs, tax cuts, and building American infrastructure but goes to keep "illiquid" assets afloat... the USA will enter a depression. ... Build America Again!
Invest in America! (Not Iraq)
I hear you and those are the best responses I've heard, even when trimmed down, to this whole god awful mess.
No offense mate, but without the bail out, without the taxpayer guarenteeing the stability of the banking system, no one in his right mind is going to invest $14 trillion into the U.S.
Not the Saudi's, not the Chinese, not Americans, not anyone.
More assets will leave, not all flood back.
The American taxpayer is underwriting the U.S. economy. The purpose of this is twofold one to inject cash into a system that has none and needs it to function, and two to provide confidence that the system will not be allowed to collapse, that America has an economy in which investors can still make money.
In which their money is not nationalised. Is not forced to do anything.... but remains theirs. Free to be spent how and where they like.
I suggest you guys to just flew ayaw from home. It will be far more better until the dollars you own still has its value. Coz it will be dead end for America soon. Rawr!
They suckered you in. They promised you magic money: invest in the market, and everyone will make lots of money! Yes, get a house you can't afford. Sink lots of money into these 401(k)s! Don't get out! Stay in! Invest more! "This company is too big to be allowed to fail." How do you think that happened? Why are we supposed to believe this? Because people invested in them, they have a hold on those people. Don't want to lose the money you invested, then make sure we don't go under, regardless of our decisions or whether there is any reason for us to exist at all. If you make a mistake, own up to it, at least to yourself. Stop making the mistake. Choose a different path -- a different solution. If you give someone else control of the result of your labor, and those people misuse or poorly use what you've given them, then why give them more of it? Pension plans failing. 401(k) funds tanking. Retirements ruined. All because of easy money... low risk, they said. Good interest, they said. In the early 1980s, only around 10% of Americans were invested in the stock market. Now it's something like 60%. They played on our cupidity and greed, on our ignorance and trust, and now they do things like railroad a $700 billion dollar plan that will not help the average joe one bit. Americans are already as deep into debt as they can handle, and even if banks get the money to loan, they wont because they know this is true. Ultimately, this is what happens if you don't hold people in government (and other areas) responsible for their actions. This is what happens if you let your lawmakers be bought for the highest dollar. This is what happens if you don't try, at least try, to understand the world in which you live so that you can judge the decisions made by the government "Of the People". Once they realize that you either don't care or don't understand, you are at their mercy, and they have none: they have only contempt. There's nothing wrong with investing in stocks per se, but people should never invest money they can't afford to lose. If you aren't wealthy enough to be able to shrug off your losses, you should stay out of it... all the way out. This is the lesson that people need to learn, but almost certainly one that most will fail to heed.
But who can afford to lose their pensions?
Should we all stop saving for our old age becuase we can't guarentee that banks or markets won't fail?
Some institutions are too big to let fail.
The Average Joe has a retirement plan too. The Average Joe works for a company that uses bank loans at pay day. The Average Joe, does not invest his own pension himself, the Average Joe does not manage his companies banking. The Average Joe can't personally see his connection and personal reliance on capitalist sytems like banks and stock markets. The Average Joe does not have the experience or eductation to recognise how it affects him.
The Average Joe can understand "$8,000 tax rise". He just can't understand why. And given that he expects to be paying that $8,000 billhimself he doesn't want to.
He'd rather it was someone else's problem. He'd rather blame someone and make them pay it all. It's human nature. Pass the buck. Blame the banker. Blame the private sector. Blame the government's corruption. Make the Saudi's pay. Make the Chinese pay. Make American's who invest abroad pay. Make the Warren Buffets pay. Anyone, but not him. Only that option is no longer available. That horse has already been flogged to death.
The Average Joe is part of the capitalist system too. And if he wants to continue to live in that kind of system, he is going to have to pay his share of keeping it afloat.
Or start something new. That's the other option. Let it all collapse. The banks the stock market, the government, the currency, the international trade. Let the whole lot go and start again.
Speaking as someone who does alright out of the existing system, I have to say that's not something I want to see.
But why should the Avergae Joe foot this bill, he didn't cause this, it was not him. Isn't this wrong? Immoral.
Is it immoral when a tree falls over and crushes a car or when a hurricance destroys a city. Are the occupants to blame for living there and not someplace away from hurricanes?
Things go wrong. The worst possible eventuality of all outcomes, occour. It is at this time when mankind bandies together. It is at this time that we act as a nation.
Hitler blamed the depression on the Jews. Rise above the blame game.
I anticipate the stock market to drop to as low as 5000 points within one year.
If the government had not intervened, it could have entered free fall to 5000, and then people sitting on a lot of capital would have come in and purchased it. It would have gone up.
The worst problem is my prediction of a global, worldwide depression with the USA at its center. The market was not allowed the crash. The bubbles were not allowed to deflate, appropriately. It will burst again, but I think it will be much worse because it is the debt and credit of the United States that will be at issue, not the world's largest investment houses and insurers.
And now that the USA has taken-over Fannie and Freddie and purchased equity stakes in the banking houses, the moral hazard situation that caused this problem is WORSE. We are seeing more centralized banking, the same easy-money policies, and socialism in the United States.
The crisis to come will be much, much worse. It is regrettable. Dramatic changes, since now everything is centralized with pro-wealthy socialism (pro-banker socialism), requires the Central Bank (private Federal Reserve) to implement policies that tighten lending to pay off the federal debt.
The generosity of USA taxpayers to defense contractors, pharmaceutical companies, corporate farmers, and bankers is going to crush the country.
Honestly, I am praying. I swear to God. I love my county, and I see very (1) irresponsible and (2) reckless central, socialized banking policies in the USA. God help us.
You think your economy is bad? at least your government doesn't say "hmm, how do we stop our people going into poverty?" and then never considers lowering the tax on something to help. Damn you Gordan Brown!
By the way I'm from the UK if you couldn't tell from the whole "Damn you Gordan Brown!"
Oh and may I ask you don't completely blame this on socialism, as socialism has brought some good things, such as free health care, but of course I don't beleive people should be pure socialist (or capitialist for that fact, both have pros and cons).
Oh and may I ask you don't completely blame this on socialism, as socialism has brought some good things, such as free health care, but of course I don't beleive people should be pure socialist (or capitialist for that fact, both have pros and cons).
The U.K., unlike most countries, has socialized medicine. As an important aside to ME, I love the U.K. and I love the British people. It is perhaps my favorite country in the world to visit. I love the pub culture, and I love the many great universities in the U.K.
Health care: government intervenes to help the public obtain affordable and accessible coverage.
Banking: government intervenes to bail-out their balance sheet that has "toxic" assets.
If we had capitalism, non centralized banking, and removed the bail-outs, moral hazards, we would have avoided this problem caused by (1) easy money and (2) government guarantees.
Edit: Easy-money and government guarantees have only expanded, not retracted, since this credit crisis. It is why I believe the next crisis will be must worse, longer, and pronounced. It is a matter of time, and it will be short-term. I hope it is averted.
NUMBER OF HOUSEHOLDS PER U.S. CENSUS 105,480,101 POSSIBLE COST PER HOUSEHOLD $24,269
In addition, the U.S. government has said it will temporarily guarantee $1.5 TRILLION in new senior debt issued by banks, as well as insure $500 billion in deposits in non-interest accounts, mainly used by businesses.
These figures take the potential cost to $4.559 TRILLION+ - or $43,221 per household.
....
Meanwhile financial workers at Wall Streets top banks are to receive pay deals worth more than $70 billion, a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year - despite plunging the global financial system into it's worst crisis since the 1929 stock market crash. link
be advised you have been lied to about the total cost of this "defaulted housing mortgage" bailout... The real cost is an additional BORROWED us$5 TRILLION debt; to be added to the current us$10.3 TRILLION debt i.e. Bailout Type............................. Cost To Taxpayers
POSSIBLE COST PER HOUSEHOLD $24,269 In addition, the U.S. government has said it will temporarily guarantee $1.5 TRILLION in new senior debt issued by banks, as well as insure $500 billion in deposits in non-interest accounts, mainly used by businesses. These figures take the potential cost to $4.559 TRILLION+ - or $43,221 per household. .... Meanwhile financial workers at Wall Street’s top banks are to receive pay deals worth more than $70 billion, a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year - despite plunging the global financial system into it's worst crisis since the 1929 stock market crash. link
billie, you are exactly right. It will cost the taxpayer, the average joe, about 5 trillion dollars, which does amount to 44,000 per individual. The risk of banks was spread to the public while the gain has been individualized to stockholders. The people pushing the bail-out plans, and now it is law, were themselves bankers with HUNDREDS OF MILLIONS of dollars in ownership in these very banks.
It is the first time in known history that I am aware of such a redistribution of wealth and risk.
It will blow-up in our faces. Edit: and now they are saying, "oh, yaaa, it really will not work. Did we say it was going to help the economy? Well, heh, it is to help rich people and banks. Sorry."
Risk was spread to the public;
Wealth is distributed to a few holders, mostly executives, with controlling or minority ownership shares, often serving as officers, and/or directors, in these firms.
It will fuel a worldwide depression, but the very wealthy of the wealthy -the money lenders- have gotten their (1) checks, (2) profits, and (3) bail-out (i) guarantees, (ii) protections, and (iii) risk-spreading to the public.
Note: Had I known banking was THIS good, I would have honestly chosen it as a profession. Honestly, you make money and you get to keep it. You make irresponsible, risky decisions and the public pays for your losses. I know of no better gig where you can make a fortune and have the generous taxpaying public pay for your risks.
No worries Obama will fix it all.Right as rain he is.
The problem is probably beyond Obama's, and McCain's, control.
What is the problem?
Immediately before the Great Depression, the Fed Chairman said that the cause of the Great Depression was wealth inequality.
Wealth inequality today is possibly greater today, right now as you read this, than immediately prior to the Great Depression.
It is worse than that.
The wealthy, playing with derivatives and loaning-money, have passed the risk off to fixed-income wage-earners, whose standard of living will decrease from inflation.
Americans were wise to oppose the bill, which is now law, and it is only getting worse.
In truth, bankers will get their way. Defense contractors will get their way.
At the cost and expense of the public.
My expectation is that the public is so far in debt --the United States is so far in debt-- that this bubble is going to not burst but totally explode.
And bail-outs will not work.
The creditors, bankers, and insurers who are politically connected got their bail-outs and protections.
The U.S. Treasury is sitting on billions of printed dollars to give to bankers, creditors, and insurers.
It is printed money, and the public will pay for it.
I know this will crash. It actually already has. And the bail-outs were sold as going to "cure" or "save" the problem and economy.
It can do neither.
In truth, people who understand this, know it will make it worse. It is a very, very, very short-term solution and remedy to get banks to make more loans.
That is it.
And this is when people are already drowning in debt, housing, consumer, student loans, etc.
Edit:
The bail-out will not work for the economy or public that pays for it.
It will work, obviously, for those that sold mortgage-backed securities and got stuck with a worthless asset with no value. (Now the taxpayer owns them. Heh. What a deal. What a country. Honestly).
So, they being powerful, twist the arm of Congress and the former CEO of Goldman Sachs sent Congress a four-page bill to give him 700 Billion Dollars (not for troops, not for tax cuts, not for health care, not for roads or schools) but to buy shit assets so banks and insurers and creditors could clear their balance sheets and make more bad loans.
It is a disaster.
I am shocked, honestly, not only that it happens --bankers are even more powerful than I knew-- but what the future costs (5 TRILLION, half the GDP) will be.
No worries Obama will fix it all.Right as rain he is.
The problem is probably beyond Obama's, and McCain's, control.
What is the problem?
Immediately before the Great Depression, the Fed Chairman said that the cause of the Great Depression was wealth inequality.
Wealth inequality today is possibly greater today, right now as you read this, than immediately prior to the Great Depression.
It is worse than that.
The wealthy, playing with derivatives and loaning-money, have passed the risk off to fixed-income wage-earners, whose standard of living will decrease from inflation.
Americans were wise to oppose the bill, which is now law, and it is only getting worse.
In truth, bankers will get their way. Defense contractors will get their way.
At the cost and expense of the public.
My expectation is that the public is so far in debt --the United States is so far in debt-- that this bubble is going to not burst but totally explode.
And bail-outs will not work.
The creditors, bankers, and insurers who are politically connected got their bail-outs and protections.
The U.S. Treasury is sitting on billions of printed dollars to give to bankers, creditors, and insurers.
It is printed money, and the public will pay for it.
I know this will crash. It actually already has. And the bail-outs were sold as going to "cure" or "save" the problem and economy.
It can do neither.
In truth, people who understand this, know it will make it worse. It is a very, very, very short-term solution and remedy to get banks to make more loans.
That is it.
And this is when people are already drowning in debt, housing, consumer, student loans, etc.
Well their is no way to grow or way out of this debt its just way to much money,its going to shackle us for sometime.
But here is how i have played my money over the yrs.
1. only 25% of my moneys is in the stock market <----- took a small hit,mostly invest in stuff i use and know will be around long after the the crash, like Nike,Walmart,Mobile,BP,Pharmaceutical.
2. 75% is in just plain old CD from my local bank.<-------and yes i sleep well at night,always been a safe player.
Trade in material assumptions for spiritual facts and make permanent progress.
The point you just made is not what people in the know are telling the public:
You cannot grow out of this problem; there is too much debt.
So then what?
As the source was easy-money policies at the Federal Reserve, we need a serious tightening of credit and begin the process of paying-it-off.
Ewww... Scarry. Paying off debt.
Otherwise it will blow-up in our faces and people will stop lending to each other, which is what happened and the U.S. government intervened to get credit flowing out.
Purchasing bad assets will not make them good. They had to deflate, there would have been some pain, and the free market would have purchased them at "market prices," not inflation prices.
The inflation economy needs to deflate.
Currency needs to get stronger.
Credit needs to get tighter. Mostly the federal government's debt load. The government needs to downsize, either by choice, or by "force" when you cannot borrow anymore.
The point you just made is not what people in the know are telling the public: You cannot grow out of this problem; there is too much debt.
So then what? As the source was easy-money policies at the Federal Reserve, we need a serious tightening of credit and begin the process of paying-it-off.
Ewww... Scarry. Paying off debt.
Otherwise it will blow-up in our faces and people will stop lending to each other, which is what happened and the U.S. government intervened to get credit flowing out.
Purchasing bad assets will not make them good. They had to deflate, there would have been some pain, and the free market would have purchased them at "market prices," not inflation prices.
The inflation economy needs to deflate. Currency needs to get stronger. Credit needs to get tighter. Mostly the federal government's debt load. The government needs to downsize, either by choice, or by "force" when you cannot borrow anymore. It will happen.
Well....dec i now things are Bad when my dad in Jersey starts sending me moneys for the right off .Im 37 go figure that one.
A forced downsize will be a welcome change .
Trade in material assumptions for spiritual facts and make permanent progress.
Let me just add this...if the Dem's and Obama win this election its going to just be a freaking blast to watch them try to spend their way out of this.
If the judges wasn't so damn important i would say just give the power to them and watch them fail.When have the Dems fixed anything for that matter.
Trade in material assumptions for spiritual facts and make permanent progress.
Let me just add this...if the Dem's and Obama win this election its going to just be a freaking blast to watch them try to spend their way out of this. If the judges wasn't so damn important i would say just give the power to them and watch them fail.When have the Dems fixed anything for that matter.
If it were just a Democrat v. Republican issue, that would take care of itself. What do you do when the people getting the bail-outs, defense contractors getting the sweet deals, and the pharamecuetical companies getting their R&D paid for control both parties?
Pray. It is what I am doing. Literally.
The country is bankrupt. But it is worse than that. When bankers get in trouble, well, we just use the U.S. Treasury to intervene and have the taxpayer buy their "toxic" assets.
Government tends to get bigger, and people tend to lose more rights, under Republican administrations than Democratic ones.
I used to be a Republican because I supported (1) the Constitution; (2) privacy rights; (3) gun rights; (4) small, limited federal government; and (5) modest foreign policy.
The Republican party has totally abandoned, and I am now a Democrat. But I am a Democrat because of what I have seen Republicans do to the country.
As to Finance controlling the country, yes, it will not matter under a Democrat and Republican Admin and/or control of Congress.
Finance and certain powerful interests will always win, at the public's cost and expense.
Let me just add this...if the Dem's and Obama win this election its going to just be a freaking blast to watch them try to spend their way out of this. If the judges wasn't so damn important i would say just give the power to them and watch them fail.When have the Dems fixed anything for that matter.
If it were just a Democrat v. Republican issue, that would take care of itself. What do you do when the people getting the bail-outs, defense contractors getting the sweet deals, and the pharamecuetical companies getting their R&D paid for control both parties?
Pray. It is what I am doing. Literally.
The country is bankrupt. But it is worse than that. When bankers get in trouble, well, we just use the U.S. Treasury to intervene and have the taxpayer buy their "toxic" assets.
Government tends to get bigger, and people tend to lose more rights, under Republican administrations than Democratic ones.
I used to be a Republican because I supported (1) the Constitution; (2) privacy rights; (3) gun rights; (4) small, limited federal government; and (5) modest foreign policy.
The Republican party has totally abandoned, and I am now a Democrat. But I am a Democrat because of what I have seen Republicans do to the country.
As to Finance controlling the country, yes, it will not matter under a Democrat and Republican Admin and/or control of Congress.
Finance and certain powerful interests will always win, at the public's cost and expense.
That is life. I accept them and that situation.
dec you should know better than vote the dems...You know he cant pay for all that he wants to give.
Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it’s dysfunctional, Democrats during the Clinton years are a prime reason for it…
[I]t was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street’s most revered institutions.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory”…
Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions.
While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge.
Market failure? Hardly. Once again, this crisis has government’s fingerprints all over it.
Trade in material assumptions for spiritual facts and make permanent progress.
dec you should know better than vote the dems...You know he cant pay for all that he wants to give. www.ibdeditorials.com/IBDArticles.aspx Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it’s dysfunctional, Democrats during the Clinton years are a prime reason for it… [I]t was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street’s most revered institutions. Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties. The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory”… Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions. While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge. Market failure? Hardly. Once again, this crisis has government’s fingerprints all over it.
Democrats are not responsible for this credit crisis anymore than sub prime mortgage borrowers.
It was the financial institutions that were repackaged and reselling the loans as derivatives.
It was the financial firms understanding that, "hey, if I take a huge risk, and I make a huge profit, I get to keep the profit; but if I lose money, and the assets I buy do not provide a return, well, hell, my buddy Bush and the U.S. Treasury and U.S. Congress will buy my mistakes."
And the moral hazard situation has gotten worse. It was actually the Europeans who suggested purchasing equity stakes in banks, which nationalized them, and the USA followed. It is better than giving-away money to insurers.
Edit: better in many senses. Not better in the sense it will help the "working-man's" economy or purchasing power or anything like that. Working people just go to work, work hard, pay taxes, and bail-out bankers when they tell them to bail them out. It is a good -- best gig -- to get into banking.
Government Sachs
Profits are Private; Losses are Nationalized
U.S. Treasury Secretary Henry Paulson is the former CEO of Goldman Sachs.
Robert Rubin, former Chairman of Goldman Sachs and U.S. Treasury secretary in Clinton's admin.
Joshua B. Bolten, former Goldman executive is President Bush's Chief of Staff.
Stephen Friedman, former chairman of Goldman Sachs, now chairman of New York Fed Reserve. (Goldman Sachs just applied to become a NY federally chartered commercial banks).
Stephen Friedman also serves on Bush's "Foreign Intelligence Advisory Board."
Edward M. Liddy, once a Goldman Sachs director, is now in charge of A.I.G. - the U.S. government just bailed-out AIG with USA taxpayer dollars.
Neel T. Kashkari, worked for Goldman in San Fransico, is now in charge, with the U.S. Treasury department, in selecting staff to run the bogus banker bail-out "program."
Edward C. Forst, Goldman veteran, advisor to Mr. Paulson on creating the bailout fund, has recently returned to executive vice president of Harvard.
Robert K. Steel, former chairman at Goldman, was hired by the Treasury to find ways to shore up Fannie Mae and Freddie Mac, and now he is the executive of Wachovia before the U.S. government took-over the two entities.
The banking world is a very close-knight, small world. I know how these people think. I know these "super-capitalists" are worth billions, often control government and the most powerful private banks (NY Federal Reserve) and are very, very "anti-socialist" except when they make reckless errors and want YOU to bail them out.
Sorry. It is not Obama. It is not the Democratic Party.
It is powerful people, able to buy both parties, and able to run our most prominent, powerful, and significant institutions. I simply
dec put the blame where it goes.banker rely on trust...trust that when they loan money it will be paid back.lack of trust is what we are dealing with.the vary people that are cause this problem are the one that are going to fix it...damn it jim its dead already.
Trade in material assumptions for spiritual facts and make permanent progress.
dec put the blame where it goes.banker rely on trust...trust that when they loan money it will be paid back.lack of trust is what we are dealing with.the vary people that are cause this problem are the one that are going to fix it...damn it jim its dead already.
Two reasons why trust was not applicable:
Mortgage-backed securities, issue the loan, bundle them up, and sell them. Who cares about trust? Pass it off to someone else.
Moral hazard. Bankers, lenders knew the government, via the generous taxpayer, would bail them out at the sign of trouble. They also knew the government would not seize their profits or demand a great deal of oversight or transparency. Hell, the bankers are in control. Take the huge risks. Why not?
You are gambling with other people's money:
If you make a profit, then you get a big bonus;
If you make a loss, then it is someone else's money; and
In the case of bankers, the government will bail-out your greed, recklessness, and irresponsibility and you get to keep your profits.
Now that the government owns banks. You know they will not let them go one.
We are back at the same spot we were just that the government owns what are called "toxic" or "illiquid" assets plus equity stakes in the country's largest banks.
It is really a nightmare, and it will lead to an economic depression that is worldwide because the USA will be at its center.
The great volatility in the stock market during the depression and today generated feelings of anxiety, uncertainity, and influenced reduced consumer-spending. The problem is that we have "supply-side" economics and "death taxes" controlling government. In other words, policies to give already rich people more money and already wealthy and fat corporations more tax breaks. The demand-side, the consumer-side, got nothing; maybe 600 bucks. Hehe.
This is the consequence of:
Tax policies
Supply-side (trickle-down) economics
No regulation
Three, government-sanctioned credit-rating agencies, and
Fraud, greed, irresponsibility, moral hazard
Politically Connected Banks and Insurers Get "Liquidity" (Free Money) and Bail-Outs (Free Money) While the Taxpayer Got - Nothing
Spending on consumer durable goods will drop such as on autos because the folks are broke; they do not get a bail-out. Why don't they just eat cake? Well, they vote Republican. And if they think they will one day, in the future, be the beneficiary of class warfare, then they will suffer on "supply-side" economics until that blissful "got rich" day. LOL.
Do You Trust Banks? Hidden Fees. Crazy Loans. Refinance!
Is putting your money in a mattress better than putting it into a bank?
Well, some banks (Bank of America, e.g.) are politically connected and cannot, will not, fail.
How is bank of America so "rich?"
It makes its money on the margins. It gets better rates than YOUR bank, loans to other banks at higher rates, and makes money that way. There is no brilliance here. He who controls the gold (now paper money) makes the rules. We should all be politically connected banks. Why? Make a fortune - keep it. Make a loss - pass it to the taxpayer.
Unemployment is RISING (and UNDERreported)
During the depression, unemployment was around 25%. Today, we have underemployment, no safety nets, and no pro-growth policies. It is looking like a depression - already.
Monetary expansion, creating mo money, is not going to work because the USA government is so broke and in so much debt.
Even worse, the USA government took out hundreds of billions of dollars in debt and dole-out billions to banks to help them pre and post crash.
The only people getting help are banks and insurers.
This is, to say the lease, going generate a worldwide depression with the USA at its centers.
The banks might buy the bottom and that might stimulate the economy, but economic planning is so centralized that we are at the mercy of U.S. Treasury Secretary and the largest banks to start to use their free taxpayer money.
This is no way to "manage" or "plan" an economy.
The banks become more powerful as a consequence of their recklessness, get free money, and now have the ability to decide when we recovery (when liquidity is injected into the market).
The next crisis will be 5 times as worse, and it will happen within two years.
The banks will be fine. Get into banking.
You will regret it if you do not!
More Dire than the Depression: Concentrated Liquidity (in a few major banks) + Loss of Confidence
Today's problem is more difficult to resolve than the great depression. During the great depression all you had to do was undergo a monetary expansion and create jobs, any jobs. Get people working again, confident again, etc.
Do NOT expect advance warnings from economists that a depression is coming.
It seems that every time I turn on any of the cable news networks that media darling Barack Obama is touting his plan to roll back the tax cuts given to the rich to pay for programs for the poor.
A little too Robin Hood for my taste, but it makes sense. Or does it?
Logic suggests that if Obama takes away the Bush tax cuts for the rich he could theoretically take that revenue (about $50 billion in each of the next two years) and use it to pay for government-sponsored, universal healthcare, larger entitlement spending, and a whole host of his proposed social programs.
Sounds good, right?
But stop right there.
What Obama isn't telling us is that the Bush tax cuts expire in 2010, and that all of the proceeds from taxing the rich are already figured into Office of Management and Budget's long-term spending and deficit forecasts.
That means that, even with the expiration of the tax cuts, we still face budget deficits and a growing national debt.
All of that doesn't include Obama's proposed $800 billion in new spending over the next four years.
So how is he going to pay for $800 billion in new spending, in addition to the projected deficit spending, in order to balance the budget?
One might say "raise taxes," an Obama mantra.
According to the Congressional Budget Office, just to pay for current programs (Social Security, Medicare, and Medicaid, among others), the federal government would have to almost double all tax rates over the next four decades.
That means that under Obama's spending plan, low-income families who do pay taxes would pay almost 20 percent in federal taxes instead of today's 10 percent rate. The middle class, the group Obama claims to provide the most tax relief to, would have to pay closer to 50 percent as opposed to the middle-class tax rate now of 25 percent.
Keep in mind all of this is without considering a single red cent of Obama's new spending proposals.
It doesn't take an economic genius to figure out that a middle-class tax rate of almost 50 percent is not feasible.
At some point the tax base must widen to cover the cost of these programs or spending must be cut.
So how will Obama and the Democrats pay for existing programs while adding billions in new ones?
The answer is very simple, "fuzzy math."
What Obama is assuming is that a Democrat-controlled Congress will pass the Bush tax cuts in 2010, and then immediately repeal them, creating new revenue.
Doesn't make sense?
Well, it shouldn't. This type of fuzzy math leads hedge funds to collapse, the mortgage industry to crumble, and we should be certain that the same will be true of our government.
As Washington is figuring out new ways to hold mortgage brokers and hedge funds accountable, Democrats should look at themselves as they promote these illogical, harebrained financing schemes through their anointed presidential candidate, Barack Obama.
In all fairness, the Bush tax cuts, while expanding the tax base, have only paid for at best 40 percent of the revenue that it has lost, according to a new paper by Robert Carroll to be published this fall in the National Tax Journal.
Therefore, to extend the Bush tax cuts, as advocated by many conservatives and pro-growth groups, Washington would need to roll up its sleeves and make serious budget cuts that narrow the deficit.
But the next time you hear Barack Obama say that he's going to tax the rich and give tax breaks to the poor and middle class, ask yourself, how's he going to pay for it?
As many investors and Americans have learned through the collapse of the housing bubble, you shouldn't buy what you can't pay for.
It's a very simple lesson with very rewarding benefits.
When we have been fiscally conservative, America has seen times of unparalleled growth. When we have been fiscally irresponsible, we have seen the Great Depression, the stagflation of the '70s, the savings and loan crisis of the late '80s, the late '90s early 2000s dot-com bust, and now our housing bubble.
So Barack Obama, instead of promoting new spending plans using fuzzy math, one that Americans can't pay for, should promote fiscal responsibility, a balanced budget, and honest government accounting.
And you do not need to cut and past an entire article.
I want to know what MMORPG-users think , not what Newsmax think. You can think for yourself if you try.
Speaking of Obama, however, this crisis is not a McCain v. Obama issue.
It is the economy, Stupid!
It is beyond politics. No. It is above politics.
The USA will enter a depression as a result of irresponsible central economic planning.
If anything, Obama is the only candidate advocate pro middle-class and demand-side policies that could, potentially, avert a depression and begin to rebuild the strengh of a great nation.
McCain's "weak area" is economics. Palin. I will not even go there.
Ben Stein, whom I do like, well, here is the price of MER, he he (he was telling the hundreds of thousands watching to buy MER at like 57):
Last Trade: 13.20
Trade Time: Nov 14
Change: Down 0.60 (4.35%)
Prev Close: 13.80
Open: 13.39
Bid: N/A
Ask: N/A
1y Target Est: 25.63
Day's Range: 12.83 - 14.30
52wk Range: 11.65 - 63.11
Volume: 31,785,394
Avg Vol (3m): 49,437,000
Market Cap: 21.12B
P/E (ttm): N/A
EPS (ttm): -23.69
Div & Yield: 1.40 (10.60%)
Aside: The USA has to borrow to weather economic storms, which in the long-run makes it worse unless invested in people, capital resources, and other areas that fix the economy.
They are going to have to buy some bad debts. The consumer credit market, from what I am hearing, is like rock bottom. Like everyone's credit is bad; no one has money; and no one can get loans.
Ya. I am nervous. Sure.
Online or TV
When people claim to be "investors" and start to stock pick - BEWARE!
Hehe. Never, ever take their advice. Ever.
Whether ME, Cramer or Stein - anyone and everyone. lol.
Comments
I think your a little premature on that one.
There are two important things to consider.
No.1 is that these things take time. This crash is the result of decades of bad management. It didn't crash overnight and any fix will not be instantly visible over night. You should be thinking on a timescale of months and years not days and weeks. Changes in the economy take a long time to work through.
It may well turn out not to work, but it is far too early to call it
N0.2 is getting a good idea of what it was intended and expected to do. The purpose of the bailout was not to "fix the economy" but to stop further banks collapsingand reinvigorate interbank lending. As far as I'm aware no banks have collapsed since the announcement of the bailout.
The scope of it's remit is rather more limited than total economic about turn. There are no miracle cures here today.
It is important to remember that the purpose of this bailout was to shore up a collapsing banking system, not to save the poor, not to restore social justice and not to make money for either the tax payer or the bankers.
There are other laws and government agendas to promote this sort of thing in the plenty. The bailout is not designed to address these issues. It is solely for the purpose of shoring up a banking system in crisis.
Yes, there are more economic problems on the current table than just the banking crisis, this bailout does not address them all, but only one specific area of them. Banking. There may be other things that need fixing, but that does not detract from the fact that the banking system is a critical area of the economy that does also.
Given the the state of the economy being able to save the banking system is no mean trick and trying to throw in man's age old and unresolvable political issues into the equation is a mistake. Why make the extremely difficult, deliberately impossible?
With regards to still being able to get car loans at the dealer, this is a good sign, not a bad sign. This is a sign that the banking system has not collapsed. That is is working.
You can hardly blame the banking bailout for working banks....... Or can you?
Ultimately the bailouts don't cure the problem but they alleviate the symptoms. They give the doctor time to treat the patient rather than it just dying first.
Make no mistake, it helps. America has bought itself more time to stave off depression, it might not succeed, but then again, it might.
Time will tell and you can't be blamed for trying.
I hear you and those are the best responses I've heard, even when trimmed down, to this whole god awful mess.
No offense mate, but without the bail out, without the taxpayer guarenteeing the stability of the banking system, no one in his right mind is going to invest $14 trillion into the U.S.
Not the Saudi's, not the Chinese, not Americans, not anyone.
More assets will leave, not all flood back.
The American taxpayer is underwriting the U.S. economy. The purpose of this is twofold one to inject cash into a system that has none and needs it to function, and two to provide confidence that the system will not be allowed to collapse, that America has an economy in which investors can still make money.
In which their money is not nationalised. Is not forced to do anything.... but remains theirs. Free to be spent how and where they like.
I suggest you guys to just flew ayaw from home. It will be far more better until the dollars you own still has its value. Coz it will be dead end for America soon. Rawr!
But who can afford to lose their pensions?
Should we all stop saving for our old age becuase we can't guarentee that banks or markets won't fail?
Some institutions are too big to let fail.
The Average Joe has a retirement plan too. The Average Joe works for a company that uses bank loans at pay day. The Average Joe, does not invest his own pension himself, the Average Joe does not manage his companies banking. The Average Joe can't personally see his connection and personal reliance on capitalist sytems like banks and stock markets. The Average Joe does not have the experience or eductation to recognise how it affects him.
The Average Joe can understand "$8,000 tax rise". He just can't understand why. And given that he expects to be paying that $8,000 bill himself he doesn't want to.
He'd rather it was someone else's problem. He'd rather blame someone and make them pay it all. It's human nature. Pass the buck. Blame the banker. Blame the private sector. Blame the government's corruption. Make the Saudi's pay. Make the Chinese pay. Make American's who invest abroad pay. Make the Warren Buffets pay. Anyone, but not him. Only that option is no longer available. That horse has already been flogged to death.
The Average Joe is part of the capitalist system too. And if he wants to continue to live in that kind of system, he is going to have to pay his share of keeping it afloat.
Or start something new. That's the other option. Let it all collapse. The banks the stock market, the government, the currency, the international trade. Let the whole lot go and start again.
Speaking as someone who does alright out of the existing system, I have to say that's not something I want to see.
But why should the Avergae Joe foot this bill, he didn't cause this, it was not him. Isn't this wrong? Immoral.
Is it immoral when a tree falls over and crushes a car or when a hurricance destroys a city. Are the occupants to blame for living there and not someplace away from hurricanes?
Things go wrong. The worst possible eventuality of all outcomes, occour. It is at this time when mankind bandies together. It is at this time that we act as a nation.
Hitler blamed the depression on the Jews. Rise above the blame game.
I anticipate the stock market to drop to as low as 5000 points within one year.
If the government had not intervened, it could have entered free fall to 5000, and then people sitting on a lot of capital would have come in and purchased it. It would have gone up.
The worst problem is my prediction of a global, worldwide depression with the USA at its center. The market was not allowed the crash. The bubbles were not allowed to deflate, appropriately. It will burst again, but I think it will be much worse because it is the debt and credit of the United States that will be at issue, not the world's largest investment houses and insurers.
And now that the USA has taken-over Fannie and Freddie and purchased equity stakes in the banking houses, the moral hazard situation that caused this problem is WORSE. We are seeing more centralized banking, the same easy-money policies, and socialism in the United States.
The crisis to come will be much, much worse. It is regrettable. Dramatic changes, since now everything is centralized with pro-wealthy socialism (pro-banker socialism), requires the Central Bank (private Federal Reserve) to implement policies that tighten lending to pay off the federal debt.
The generosity of USA taxpayers to defense contractors, pharmaceutical companies, corporate farmers, and bankers is going to crush the country.
Honestly, I am praying. I swear to God. I love my county, and I see very (1) irresponsible and (2) reckless central, socialized banking policies in the USA. God help us.
You think your economy is bad? at least your government doesn't say "hmm, how do we stop our people going into poverty?" and then never considers lowering the tax on something to help. Damn you Gordan Brown!
By the way I'm from the UK if you couldn't tell from the whole "Damn you Gordan Brown!"
Oh and may I ask you don't completely blame this on socialism, as socialism has brought some good things, such as free health care, but of course I don't beleive people should be pure socialist (or capitialist for that fact, both have pros and cons).
The U.K., unlike most countries, has socialized medicine. As an important aside to ME, I love the U.K. and I love the British people. It is perhaps my favorite country in the world to visit. I love the pub culture, and I love the many great universities in the U.K.
Health care: government intervenes to help the public obtain affordable and accessible coverage.
Banking: government intervenes to bail-out their balance sheet that has "toxic" assets.
If we had capitalism, non centralized banking, and removed the bail-outs, moral hazards, we would have avoided this problem caused by (1) easy money and (2) government guarantees.
Edit: Easy-money and government guarantees have only expanded, not retracted, since this credit crisis. It is why I believe the next crisis will be must worse, longer, and pronounced. It is a matter of time, and it will be short-term. I hope it is averted.
be advised you have been lied to about the total cost of this "defaulted housing mortgage" bailout...
The real cost is an additional BORROWED us$5 TRILLION debt; to be added to the current us$10.3 TRILLION debt
i.e.
Bailout Type............................. Cost To Taxpayers
Pelosis latest economic-stimulus package ..... $300 billion
Paulsons Bank Nationalization package ........ $250billion
Bailout to the American car companies ....... $25 billion
Nancy Pelosis bailout of the state and local governments .... $150 billion
Financial bailout bill ......... $700 billion+
Bear Stearns financing ....... $29 billion
Fannie Mae and Freddie Mac nationalization ....... $200 billion
AIG loan and nationalization ........ $85 billion (+ extra request of $35 billion)
Federal Housing Administration housing rescue bill ....... $300 billion
Mortgage community grants ....... $4 billion
JPMorgan Chase repayments ..... $87 billion
Loans to banks via Feds Term Auction Facility ....... $200 billion+
Loans from Depression-era Exchange Stabilization Fund ...... $50 billion
Purchases of mortgage securities by Fannie/Freddie ....... $144 billion
POSSIBLE TOTAL $2.56 TRILLION+
NUMBER OF HOUSEHOLDS PER U.S. CENSUS 105,480,101
POSSIBLE COST PER HOUSEHOLD $24,269
In addition, the U.S. government has said it will temporarily guarantee $1.5 TRILLION in new senior debt issued by banks, as well as insure $500 billion in deposits in non-interest accounts, mainly used by businesses.
These figures take the potential cost to $4.559 TRILLION+ - or $43,221 per household.
....
Meanwhile financial workers at Wall Streets top banks are to receive pay deals worth more than $70 billion, a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year - despite plunging the global financial system into it's worst crisis since the 1929 stock market crash. link
billie, you are exactly right. It will cost the taxpayer, the average joe, about 5 trillion dollars, which does amount to 44,000 per individual. The risk of banks was spread to the public while the gain has been individualized to stockholders. The people pushing the bail-out plans, and now it is law, were themselves bankers with HUNDREDS OF MILLIONS of dollars in ownership in these very banks.
It is the first time in known history that I am aware of such a redistribution of wealth and risk.
It will blow-up in our faces. Edit: and now they are saying, "oh, yaaa, it really will not work. Did we say it was going to help the economy? Well, heh, it is to help rich people and banks. Sorry."
Risk was spread to the public;
Wealth is distributed to a few holders, mostly executives, with controlling or minority ownership shares, often serving as officers, and/or directors, in these firms.
It will fuel a worldwide depression, but the very wealthy of the wealthy -the money lenders- have gotten their (1) checks, (2) profits, and (3) bail-out (i) guarantees, (ii) protections, and (iii) risk-spreading to the public.
Note: Had I known banking was THIS good, I would have honestly chosen it as a profession. Honestly, you make money and you get to keep it. You make irresponsible, risky decisions and the public pays for your losses. I know of no better gig where you can make a fortune and have the generous taxpaying public pay for your risks.
No worries Obama will fix it all.Right as rain he is.
Trade in material assumptions for spiritual facts and make permanent progress.
The problem is probably beyond Obama's, and McCain's, control.
What is the problem?
Immediately before the Great Depression, the Fed Chairman said that the cause of the Great Depression was wealth inequality.
Wealth inequality today is possibly greater today, right now as you read this, than immediately prior to the Great Depression.
It is worse than that.
The wealthy, playing with derivatives and loaning-money, have passed the risk off to fixed-income wage-earners, whose standard of living will decrease from inflation.
Americans were wise to oppose the bill, which is now law, and it is only getting worse.
In truth, bankers will get their way. Defense contractors will get their way.
At the cost and expense of the public.
My expectation is that the public is so far in debt --the United States is so far in debt-- that this bubble is going to not burst but totally explode.
And bail-outs will not work.
The creditors, bankers, and insurers who are politically connected got their bail-outs and protections.
The U.S. Treasury is sitting on billions of printed dollars to give to bankers, creditors, and insurers.
It is printed money, and the public will pay for it.
I know this will crash. It actually already has. And the bail-outs were sold as going to "cure" or "save" the problem and economy.
It can do neither.
In truth, people who understand this, know it will make it worse. It is a very, very, very short-term solution and remedy to get banks to make more loans.
That is it.
And this is when people are already drowning in debt, housing, consumer, student loans, etc.
Edit:
The bail-out will not work for the economy or public that pays for it.
It will work, obviously, for those that sold mortgage-backed securities and got stuck with a worthless asset with no value. (Now the taxpayer owns them. Heh. What a deal. What a country. Honestly).
So, they being powerful, twist the arm of Congress and the former CEO of Goldman Sachs sent Congress a four-page bill to give him 700 Billion Dollars (not for troops, not for tax cuts, not for health care, not for roads or schools) but to buy shit assets so banks and insurers and creditors could clear their balance sheets and make more bad loans.
It is a disaster.
I am shocked, honestly, not only that it happens --bankers are even more powerful than I knew-- but what the future costs (5 TRILLION, half the GDP) will be.
Economic depression, within two years.
The problem is probably beyond Obama's, and McCain's, control.
What is the problem?
Immediately before the Great Depression, the Fed Chairman said that the cause of the Great Depression was wealth inequality.
Wealth inequality today is possibly greater today, right now as you read this, than immediately prior to the Great Depression.
It is worse than that.
The wealthy, playing with derivatives and loaning-money, have passed the risk off to fixed-income wage-earners, whose standard of living will decrease from inflation.
Americans were wise to oppose the bill, which is now law, and it is only getting worse.
In truth, bankers will get their way. Defense contractors will get their way.
At the cost and expense of the public.
My expectation is that the public is so far in debt --the United States is so far in debt-- that this bubble is going to not burst but totally explode.
And bail-outs will not work.
The creditors, bankers, and insurers who are politically connected got their bail-outs and protections.
The U.S. Treasury is sitting on billions of printed dollars to give to bankers, creditors, and insurers.
It is printed money, and the public will pay for it.
I know this will crash. It actually already has. And the bail-outs were sold as going to "cure" or "save" the problem and economy.
It can do neither.
In truth, people who understand this, know it will make it worse. It is a very, very, very short-term solution and remedy to get banks to make more loans.
That is it.
And this is when people are already drowning in debt, housing, consumer, student loans, etc.
Well their is no way to grow or way out of this debt its just way to much money,its going to shackle us for sometime.
But here is how i have played my money over the yrs.
1. only 25% of my moneys is in the stock market <----- took a small hit,mostly invest in stuff i use and know will be around long after the the crash, like Nike,Walmart,Mobile,BP,Pharmaceutical.
2. 75% is in just plain old CD from my local bank.<-------and yes i sleep well at night,always been a safe player.
Trade in material assumptions for spiritual facts and make permanent progress.
The point you just made is not what people in the know are telling the public:
You cannot grow out of this problem; there is too much debt.
So then what?
As the source was easy-money policies at the Federal Reserve, we need a serious tightening of credit and begin the process of paying-it-off.
Ewww... Scarry. Paying off debt.
Otherwise it will blow-up in our faces and people will stop lending to each other, which is what happened and the U.S. government intervened to get credit flowing out.
Purchasing bad assets will not make them good. They had to deflate, there would have been some pain, and the free market would have purchased them at "market prices," not inflation prices.
The inflation economy needs to deflate.
Currency needs to get stronger.
Credit needs to get tighter. Mostly the federal government's debt load. The government needs to downsize, either by choice, or by "force" when you cannot borrow anymore.
It will happen.
Well....dec i now things are Bad when my dad in Jersey starts sending me moneys for the right off .Im 37 go figure that one.
A forced downsize will be a welcome change .
Trade in material assumptions for spiritual facts and make permanent progress.
Let me just add this...if the Dem's and Obama win this election its going to just be a freaking blast to watch them try to spend their way out of this.
If the judges wasn't so damn important i would say just give the power to them and watch them fail.When have the Dems fixed anything for that matter.
Trade in material assumptions for spiritual facts and make permanent progress.
If it were just a Democrat v. Republican issue, that would take care of itself. What do you do when the people getting the bail-outs, defense contractors getting the sweet deals, and the pharamecuetical companies getting their R&D paid for control both parties?
Pray. It is what I am doing. Literally.
The country is bankrupt. But it is worse than that. When bankers get in trouble, well, we just use the U.S. Treasury to intervene and have the taxpayer buy their "toxic" assets.
Government tends to get bigger, and people tend to lose more rights, under Republican administrations than Democratic ones.
I used to be a Republican because I supported (1) the Constitution; (2) privacy rights; (3) gun rights; (4) small, limited federal government; and (5) modest foreign policy.
The Republican party has totally abandoned, and I am now a Democrat. But I am a Democrat because of what I have seen Republicans do to the country.
As to Finance controlling the country, yes, it will not matter under a Democrat and Republican Admin and/or control of Congress.
Finance and certain powerful interests will always win, at the public's cost and expense.
That is life. I accept them and that situation.
If it were just a Democrat v. Republican issue, that would take care of itself. What do you do when the people getting the bail-outs, defense contractors getting the sweet deals, and the pharamecuetical companies getting their R&D paid for control both parties?
Pray. It is what I am doing. Literally.
The country is bankrupt. But it is worse than that. When bankers get in trouble, well, we just use the U.S. Treasury to intervene and have the taxpayer buy their "toxic" assets.
Government tends to get bigger, and people tend to lose more rights, under Republican administrations than Democratic ones.
I used to be a Republican because I supported (1) the Constitution; (2) privacy rights; (3) gun rights; (4) small, limited federal government; and (5) modest foreign policy.
The Republican party has totally abandoned, and I am now a Democrat. But I am a Democrat because of what I have seen Republicans do to the country.
As to Finance controlling the country, yes, it will not matter under a Democrat and Republican Admin and/or control of Congress.
Finance and certain powerful interests will always win, at the public's cost and expense.
That is life. I accept them and that situation.
dec you should know better than vote the dems...You know he cant pay for all that he wants to give.
www.ibdeditorials.com/IBDArticles.aspx
Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it’s dysfunctional, Democrats during the Clinton years are a prime reason for it…
[I]t was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street’s most revered institutions.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory”…
Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions.
While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge.
Market failure? Hardly. Once again, this crisis has government’s fingerprints all over it.
Trade in material assumptions for spiritual facts and make permanent progress.
Democrats are not responsible for this credit crisis anymore than sub prime mortgage borrowers.
It was the financial institutions that were repackaged and reselling the loans as derivatives.
It was the financial firms understanding that, "hey, if I take a huge risk, and I make a huge profit, I get to keep the profit; but if I lose money, and the assets I buy do not provide a return, well, hell, my buddy Bush and the U.S. Treasury and U.S. Congress will buy my mistakes."
And the moral hazard situation has gotten worse. It was actually the Europeans who suggested purchasing equity stakes in banks, which nationalized them, and the USA followed. It is better than giving-away money to insurers.
Edit: better in many senses. Not better in the sense it will help the "working-man's" economy or purchasing power or anything like that. Working people just go to work, work hard, pay taxes, and bail-out bankers when they tell them to bail them out. It is a good -- best gig -- to get into banking.
Government Sachs
Profits are Private; Losses are Nationalized
U.S. Treasury Secretary Henry Paulson is the former CEO of Goldman Sachs.
Robert Rubin, former Chairman of Goldman Sachs and U.S. Treasury secretary in Clinton's admin.
Joshua B. Bolten, former Goldman executive is President Bush's Chief of Staff.
Stephen Friedman, former chairman of Goldman Sachs, now chairman of New York Fed Reserve. (Goldman Sachs just applied to become a NY federally chartered commercial banks).
Stephen Friedman also serves on Bush's "Foreign Intelligence Advisory Board."
Edward M. Liddy, once a Goldman Sachs director, is now in charge of A.I.G. - the U.S. government just bailed-out AIG with USA taxpayer dollars.
Neel T. Kashkari, worked for Goldman in San Fransico, is now in charge, with the U.S. Treasury department, in selecting staff to run the bogus banker bail-out "program."
Edward C. Forst, Goldman veteran, advisor to Mr. Paulson on creating the bailout fund, has recently returned to executive vice president of Harvard.
Robert K. Steel, former chairman at Goldman, was hired by the Treasury to find ways to shore up Fannie Mae and Freddie Mac, and now he is the executive of Wachovia before the U.S. government took-over the two entities.
The banking world is a very close-knight, small world. I know how these people think. I know these "super-capitalists" are worth billions, often control government and the most powerful private banks (NY Federal Reserve) and are very, very "anti-socialist" except when they make reckless errors and want YOU to bail them out.
Sorry. It is not Obama. It is not the Democratic Party.
It is powerful people, able to buy both parties, and able to run our most prominent, powerful, and significant institutions. I simply
dec put the blame where it goes.banker rely on trust...trust that when they loan money it will be paid back.lack of trust is what we are dealing with.the vary people that are cause this problem are the one that are going to fix it...damn it jim its dead already.
Trade in material assumptions for spiritual facts and make permanent progress.
Two reasons why trust was not applicable:
You are gambling with other people's money:
Now that the government owns banks. You know they will not let them go one.
We are back at the same spot we were just that the government owns what are called "toxic" or "illiquid" assets plus equity stakes in the country's largest banks.
It is really a nightmare, and it will lead to an economic depression that is worldwide because the USA will be at its center.
Have We Learned from the LAST Depression?
The great volatility in the stock market during the depression and today generated feelings of anxiety, uncertainity, and influenced reduced consumer-spending. The problem is that we have "supply-side" economics and "death taxes" controlling government. In other words, policies to give already rich people more money and already wealthy and fat corporations more tax breaks. The demand-side, the consumer-side, got nothing; maybe 600 bucks. Hehe.
This is the consequence of:
Politically Connected Banks and Insurers Get "Liquidity" (Free Money) and Bail-Outs (Free Money) While the Taxpayer Got - Nothing
Spending on consumer durable goods will drop such as on autos because the folks are broke; they do not get a bail-out. Why don't they just eat cake? Well, they vote Republican. And if they think they will one day, in the future, be the beneficiary of class warfare, then they will suffer on "supply-side" economics until that blissful "got rich" day. LOL.
Do You Trust Banks? Hidden Fees. Crazy Loans. Refinance!
Is putting your money in a mattress better than putting it into a bank?
Well, some banks (Bank of America, e.g.) are politically connected and cannot, will not, fail.
How is bank of America so "rich?"
It makes its money on the margins. It gets better rates than YOUR bank, loans to other banks at higher rates, and makes money that way. There is no brilliance here. He who controls the gold (now paper money) makes the rules. We should all be politically connected banks. Why? Make a fortune - keep it. Make a loss - pass it to the taxpayer.
Unemployment is RISING (and UNDERreported)
During the depression, unemployment was around 25%. Today, we have underemployment, no safety nets, and no pro-growth policies. It is looking like a depression - already.
Monetary expansion, creating mo money, is not going to work because the USA government is so broke and in so much debt.
Even worse, the USA government took out hundreds of billions of dollars in debt and dole-out billions to banks to help them pre and post crash.
The only people getting help are banks and insurers.
This is, to say the lease, going generate a worldwide depression with the USA at its centers.
The banks might buy the bottom and that might stimulate the economy, but economic planning is so centralized that we are at the mercy of U.S. Treasury Secretary and the largest banks to start to use their free taxpayer money.
This is no way to "manage" or "plan" an economy.
The banks become more powerful as a consequence of their recklessness, get free money, and now have the ability to decide when we recovery (when liquidity is injected into the market).
The next crisis will be 5 times as worse, and it will happen within two years.
The banks will be fine. Get into banking.
You will regret it if you do not!
More Dire than the Depression: Concentrated Liquidity (in a few major banks) + Loss of Confidence
Today's problem is more difficult to resolve than the great depression. During the great depression all you had to do was undergo a monetary expansion and create jobs, any jobs. Get people working again, confident again, etc.
Do NOT expect advance warnings from economists that a depression is coming.
Yup with Obamas Fuzzy math we will definately enter a depression.
Obama's Math Just Doesn't Add Up
moneynews.newsmax.com/dan_mangru/dan_mangru_obama_math/2008/09/11/129769.html
Thursday, September 11, 2008 9:40 AM
By: Dan Mangru Article Font Size
It seems that every time I turn on any of the cable news networks that media darling Barack Obama is touting his plan to roll back the tax cuts given to the rich to pay for programs for the poor.
A little too Robin Hood for my taste, but it makes sense. Or does it?
Logic suggests that if Obama takes away the Bush tax cuts for the rich he could theoretically take that revenue (about $50 billion in each of the next two years) and use it to pay for government-sponsored, universal healthcare, larger entitlement spending, and a whole host of his proposed social programs.
Sounds good, right?
But stop right there.
What Obama isn't telling us is that the Bush tax cuts expire in 2010, and that all of the proceeds from taxing the rich are already figured into Office of Management and Budget's long-term spending and deficit forecasts.
That means that, even with the expiration of the tax cuts, we still face budget deficits and a growing national debt.
All of that doesn't include Obama's proposed $800 billion in new spending over the next four years.
So how is he going to pay for $800 billion in new spending, in addition to the projected deficit spending, in order to balance the budget?
One might say "raise taxes," an Obama mantra.
According to the Congressional Budget Office, just to pay for current programs (Social Security, Medicare, and Medicaid, among others), the federal government would have to almost double all tax rates over the next four decades.
That means that under Obama's spending plan, low-income families who do pay taxes would pay almost 20 percent in federal taxes instead of today's 10 percent rate. The middle class, the group Obama claims to provide the most tax relief to, would have to pay closer to 50 percent as opposed to the middle-class tax rate now of 25 percent.
Keep in mind all of this is without considering a single red cent of Obama's new spending proposals.
It doesn't take an economic genius to figure out that a middle-class tax rate of almost 50 percent is not feasible.
At some point the tax base must widen to cover the cost of these programs or spending must be cut.
So how will Obama and the Democrats pay for existing programs while adding billions in new ones?
The answer is very simple, "fuzzy math."
What Obama is assuming is that a Democrat-controlled Congress will pass the Bush tax cuts in 2010, and then immediately repeal them, creating new revenue.
Doesn't make sense?
Well, it shouldn't. This type of fuzzy math leads hedge funds to collapse, the mortgage industry to crumble, and we should be certain that the same will be true of our government.
As Washington is figuring out new ways to hold mortgage brokers and hedge funds accountable, Democrats should look at themselves as they promote these illogical, harebrained financing schemes through their anointed presidential candidate, Barack Obama.
In all fairness, the Bush tax cuts, while expanding the tax base, have only paid for at best 40 percent of the revenue that it has lost, according to a new paper by Robert Carroll to be published this fall in the National Tax Journal.
Therefore, to extend the Bush tax cuts, as advocated by many conservatives and pro-growth groups, Washington would need to roll up its sleeves and make serious budget cuts that narrow the deficit.
But the next time you hear Barack Obama say that he's going to tax the rich and give tax breaks to the poor and middle class, ask yourself, how's he going to pay for it?
As many investors and Americans have learned through the collapse of the housing bubble, you shouldn't buy what you can't pay for.
It's a very simple lesson with very rewarding benefits.
When we have been fiscally conservative, America has seen times of unparalleled growth. When we have been fiscally irresponsible, we have seen the Great Depression, the stagflation of the '70s, the savings and loan crisis of the late '80s, the late '90s early 2000s dot-com bust, and now our housing bubble.
So Barack Obama, instead of promoting new spending plans using fuzzy math, one that Americans can't pay for, should promote fiscal responsibility, a balanced budget, and honest government accounting.
Now that's change I can believe in.
© 2008 Newsmax. All rights reserved.
You really should not read Newsmax.
And you do not need to cut and past an entire article.
I want to know what MMORPG-users think , not what Newsmax think. You can think for yourself if you try.
Speaking of Obama, however, this crisis is not a McCain v. Obama issue.
It is the economy, Stupid!
It is beyond politics. No. It is above politics.
The USA will enter a depression as a result of irresponsible central economic planning.
If anything, Obama is the only candidate advocate pro middle-class and demand-side policies that could, potentially, avert a depression and begin to rebuild the strengh of a great nation.
McCain's "weak area" is economics. Palin. I will not even go there.
Rare, and I mean, rare is it to find someone on television who "gets it."
I cannot believe I never read this guy's book, if he has one: www.youtube.com/watch
Ben Stein, whom I do like, well, here is the price of MER, he he (he was telling the hundreds of thousands watching to buy MER at like 57):
Last Trade: 13.20
Trade Time: Nov 14
Change: Down 0.60 (4.35%)
Prev Close: 13.80
Open: 13.39
Bid: N/A
Ask: N/A
1y Target Est: 25.63
Day's Range: 12.83 - 14.30
52wk Range: 11.65 - 63.11
Volume: 31,785,394
Avg Vol (3m): 49,437,000
Market Cap: 21.12B
P/E (ttm): N/A
EPS (ttm): -23.69
Div & Yield: 1.40 (10.60%)
Aside: The USA has to borrow to weather economic storms, which in the long-run makes it worse unless invested in people, capital resources, and other areas that fix the economy.
They are going to have to buy some bad debts. The consumer credit market, from what I am hearing, is like rock bottom. Like everyone's credit is bad; no one has money; and no one can get loans.
Ya. I am nervous. Sure.
Online or TV
When people claim to be "investors" and start to stock pick - BEWARE!
Hehe. Never, ever take their advice. Ever.
Whether ME, Cramer or Stein - anyone and everyone. lol.