excellent explanation of current economy

if you don’t understand why our economy is gasping, this about the best explanation I’ve read or heard

http://www.forbes.com/feeds/ap/2008/09/19/ap5447812.html

if you don't understand why our economy is gasping, this about the best explanation I've read or heard

[URL]http://www.forbes.com/feeds/ap/2008/09/19/ap5447812.html[/URL]

Ssssshhh… we can’t let this get out Metro… lest our American population actually give a ****…

FWIW: This is a very good read.

Ssssshhh.... we can't let this get out Metro... lest our American population actually give a ****...

FWIW: This is a very good read.

people better give a crap, we are weeks away from another Great Depression IMHO

this new deal they are working on sounds brilliant though, you clean up all this bad dept and lower it off the ship like a lifeboat, and the money flows again into our system

whatever Paulson told congress late last night scared the hell out of Pelosi and the pubs

[URL]http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/19/bcn-jqcomm11.xml[/URL]

THE BAD BANK…stroke of genius

[QUOTE]But to date no bank has managed the pull off a good bank/bad bank structure, and no-one will. Revealing one’s hand in such a way is rather like showing your cards during during a game of poker. No-one is really willing to do it, but at the same time, without doing so, no-one will believe what’s in your hand.
What this fund - however it is structured - will provide is the opportunity for all the banks to show their hands at once, moving these distressed assets off their balance sheets once and for all.
[/QUOTE]

[QUOTE=metro;343242]people better give a crap, we are weeks away from another Great Depression IMHO

this new deal they are working on sounds brilliant though, you clean up all this bad dept and lower it off the ship like a lifeboat, and the money flows again into our system

whatever Paulson told congress late last night scared the hell out of Pelosi and the pubs[/QUOTE]

This is scary times, especially for me because, in all honesty, when it comes to economics… I’m ignorant. I have no idea what’s going on, and can’t really decipher what all that meant for myself.

This is scary times, especially for me because, in all honesty, when it comes to economics... I'm ignorant. I have no idea what's going on, and can't really decipher what all that meant for myself.

essentially there are 15,000,0000 bad mortgages these banks have on the books

x $250,000 a piece

= 375,000,000,000 billion in illiquid assets

you give these banks a chance to dump it and get back to business of lending

this link is great too:
http://biz.yahoo.com/ap/080919/financial_meltdown.html

Actually I care more about the economy than the election right now. Especially since both major candidates are more interested in trading blows than promoting policy.

[QUOTE=metro;343242]people better give a crap, we are weeks away from another Great Depression IMHO

this new deal they are working on sounds brilliant though, you clean up all this bad dept and lower it off the ship like a lifeboat, and the money flows again into our system

whatever Paulson told congress late last night scared the hell out of Pelosi and the pubs[/QUOTE]

I think he said what you just said, great depression, soup lines, shantytown, etc. I knew it was bad but up to this point I didn’t know it was great depression bad. Banks definately need to be re-regulated. The way these companies have been acting, and I know you can’t bring in new business by looking weak and desperate, kind of reminds me of when my dad’s business declared bankruptcy. He never told anyone how bad things were, just kept borrowing money from family and friends because he was ashamed of failing and then it all blew up in his face and he lost everything, no retirement, nada. These banks were so prideful and secretive that some of these failures are news to most of the employees, of course you don’t want to cause panic but jeez.

The only course we have is to take on the bad debt and hope it gets a little more profitable.

But if we take on that much debt, our currency will take a real hit. I’m worried about inflation, but what are our options? High inflation or depression.

how can everyone here be serious about this? i can’t believe what i’m hearing. your asking the taxpayer’s to take on all of the banks bad debt? we are on the edge of socialism. this is completely unmoral, and un-American. wake up and see what is happing the dollar will be trashed, and gas will be 7 bucks a gallon. we have to end these bailouts. the country is on the line. where do you think the money is coming from?

[QUOTE=finalfourtyniners;343286]how can everyone here be serious about this? i can’t believe what i’m hearing. your asking the taxpayer’s to take on all of the banks bad debt? we are on the edge of socialism. this is completely unmoral, and un-American. wake up and see what is happing the dollar will be trashed, and gas will be 7 bucks a gallon. we have to end these bailouts. the country is on the line. where do you think the money is coming from?[/QUOTE]

A agree. I feel like everyone out there who is defaulting on loans is getting off for free, while we (the taxpayers) are working our way to a $1 trillion annual deficit.

A agree. I feel like everyone out there who is defaulting on loans is getting off for free, while we (the taxpayers) are working our way to a $1 trillion annual deficit.

So what’s your solution? Here’s the sad circumstance: if no bailout, the two last investment firms would fail. There would thus be a run on commercial banks because of fear. Therefore, banks would refuse to lend. Therefore, rates would rocket. Your CC could seriously be 30% for a good rate.

Add to the point that companies would not be able to borrow. We would have 30% unemployment. Things would not be expensive, but any assets you own (car, house, 401(k), etc.) would instantly be worth half. You may hate the word socialism, but inflation is alot less worrisome than depression.

[QUOTE=C49er;343300]A agree. I feel like everyone out there who is defaulting on loans is getting off for free, while we (the taxpayers) are working our way to a $1 trillion annual deficit.[/QUOTE]

I wouldn’t say those people are getting off free, their credit is in ruins and they are probably not so well off financially.

The people who knowingly gave out bad loans are the ones who got away with it all and will not face the consequences like everyone else.

[QUOTE=Charlotte2002;343304]I wouldn’t say those people are getting off free, their credit is in ruins and they are probably not so well off financially.
[/QUOTE]

That obviously did not stop banks and creditors before from giving these people the many loans that started all of this. So yes, they get off with nothing more than what they already had before the loan, and those of us that pay every month on time get stuck paying their way. I don’t disagree that the vulturing mortgagers are much to blame also, but ultimately it’s the borrower that knows what he owes and knows it’s his responsibility to pay. What penalty are they getting? Bad credit. So what, they can still get a loan later and they can probably get a credit card tomorrow.

[QUOTE=cakewalk5;343302]So what’s your solution? Here’s the sad circumstance: if no bailout, the two last investment firms would fail. There would thus be a run on commercial banks because of fear. Therefore, banks would refuse to lend. Therefore, rates would rocket. Your CC could seriously be 30% for a good rate.

Add to the point that companies would not be able to borrow. We would have 30% unemployment. Things would not be expensive, but any assets you own (car, house, 401(k), etc.) would instantly be worth half. You may hate the word socialism, but inflation is alot less worrisome than depression.[/QUOTE]

As long as the people that got the country into this mess have some level of accountability, meaning…that the people that defaulted aren’t cleared of everything in a few years, and that the banks/lenders that kept giving and giving when they shouldn’t have aren’t simply allowed to clear off their books and start doing the same thing.

I just like it when people are held accountable. I don’t know the details of the plans that are going on, but neither of these groups deserve a free pass.

Like I said, I don’t know the details, so make me feel better. :smile:

So what's your solution? Here's the sad circumstance: if no bailout, the two last investment firms would fail. There would thus be a run on commercial banks because of fear. Therefore, banks would refuse to lend. Therefore, rates would rocket. Your CC could seriously be 30% for a good rate.

Add to the point that companies would not be able to borrow. We would have 30% unemployment. Things would not be expensive, but any assets you own (car, house, 401(k), etc.) would instantly be worth half. You may hate the word socialism, but inflation is alot less worrisome than depression.

people view creditcards wrong. if you view them as anything more than a glorified/easy checkbook… you are screwing yourself. I’m 29, have an ok job. and a CC, I pay off monthly. I laugh at anyone who does not, as all they are doing is throwing money away. Maybe if the CC rates were 30% it would encourage more fiscal responsibility.

not sure what i think about the mortgage situation. I bought my first home at the height of low/nocost subprime loans, and was smart enough not to overextend. wish people were smarter, and banks weren’t out to make every nickle/dime they could. i think alot of the problems can all be traced back to either consumer ignorance, or the preying on consumer ignorance.

:twocents:

As long as the people that got the country into this mess have some level of accountability, meaning...that the people that defaulted aren't cleared of everything in a few years, and that the banks/lenders that kept giving and giving when they shouldn't have aren't simply allowed to clear off their books and start doing the same thing.

I just like it when people are held accountable. I don’t know the details of the plans that are going on, but neither of these groups deserve a free pass.

Like I said, I don’t know the details, so make me feel better. :smile:

There should be accountability and regulation. For example, bring back usury laws, cap personal profits over 5 million so you pay 90% tax, put back in personal liability for executives, etc.

But then we are talking about basically repealing the financial pieces the Reagan administration put in place.

people view creditcards wrong. if you view them as anything more than a glorified/easy checkbook... you are screwing yourself. I'm 29, have an ok job. and a CC, I pay off monthly. I laugh at anyone who does not, as all they are doing is throwing money away. [B][I]Maybe if the CC rates were 30% it would encourage more fiscal responsibility.[/I][/B]

not sure what i think about the mortgage situation. I bought my first home at the height of low/nocost subprime loans, and was smart enough not to overextend. wish people were smarter, and banks weren’t out to make every nickle/dime they could. i think alot of the problems can all be traced back to either consumer ignorance, or the preying on consumer ignorance.

:twocents:

QFT

People love getting ****ed in this country. You can tell by our booming porn industry (lol j/k)

But really, we make it too easy for people to get what they want when they need it.

Remember when your parents made you save up your allowance for weeks to buy something? I mean where did those values go? CC man, they teach us wrong!

people view creditcards wrong. if you view them as anything more than a glorified/easy checkbook... you are screwing yourself. I'm 29, have an ok job. and a CC, I pay off monthly. I laugh at anyone who does not, as all they are doing is throwing money away. Maybe if the CC rates were 30% it would encourage more fiscal responsibility.

not sure what i think about the mortgage situation. I bought my first home at the height of low/nocost subprime loans, and was smart enough not to overextend. wish people were smarter, and banks weren’t out to make every nickle/dime they could. i think alot of the problems can all be traced back to either consumer ignorance, or the preying on consumer ignorance.

:twocents:

Hey Anborn, the problem is that this would spill over to alot of innocent people. Tried to throw one example of a CC out, but let’s not look at CC. Let’s look at lending lines to a business. That would be removed. Thus, the business would require cash. Any service oriented business would grind to a halt, which typically require floating loans for daily business. Workforces would be jettisoned b/c of a liquidity crisis.

Not to mention other loans, such as housing and car loans would be non-existent. You would not be able to sell your house for anything close to value b/c the buyer would need cash in hand.

I guess back in 1989 something similar happened. The US had a ton of office space that was vacant, and the US bought it up. Over time the govt sold those assets and made money on them.

Lets hope its similar.

(btw, it took about 5 years for the economy to turn) 1994