A must read

[roykirk]

Gimme a break.

?   I looked over his shoulder as he looked at his online statement.  Granted, such losses can be made up fast if things rebound.  His losses were spread over four funds, one fund lost $20K by itself.  I have no idea how much his total account value was, but I would guess by his number of years in the job, probably around $500K.  I didn't ask him the "why" of where he had his money invested.     His demeanor the rest of the day told me he wasn't up for questions.  I myself saw a decrease in value of my total accounts in the neighborhood of $7,000 during the same period of time, but I have lots of years left so I'm not really sweating it.

[vwrw]

Sorry, this is Turboguy's post who did not notice he was logged into his wifes acct.

I have to agree with Ronnie, they pass a good bailout plan and the value of his 401-K will likely recover a big part of the value. 

I do think the problem is more serious than Ronnie seems to and I think it needs to be dealt with.   Bank failures can be like Domino's.   Some fail and the lack of confidence will put added pressure on the remaining banks who didn't make bad loans.   

Our economy is based on a viable credit system.  If we were forced to go to a cash basis because credit was unavailable our way of life would be very different. 

Personally I think panicing over the value of a 401-K's drop in value for one day is foolish.   American's tend to be a little foolish sometimes.   Stocks go down they sell, stocks go up they buy.  They talk about buying low and selling high but tend to want to buy high and sell low.    If you don't need the money today the value of the stocks today don't mean anything.   It's a fluctuation, perhaps a large one but still it has little bearing on what the value of his portfolio will be next year.

I am not that heavy into stocks but to be honest I haven't even looked to see what it did to my portfolio and I don't care.   I have looked at the individual prices of my stocks and I sorta like what I see.  I may start doing some serious buying while the opportunity is good.

[Shadow]

The bailout plan is basicly to take the money people have taken out of the bank and stock system back by letting it be paid by taxes.
Difference is that you do not get your tax dollars back.

Biofuel is not the answer, ask anyone who thinks so a feasibility study on what would happen to the world food production and prices if 20% of the current transportation was to be transferred to biofuel.

As for the crisis, no matter how hard people deny it, the old economic principle of up/down waves every 20-30 years still seems to be working.
Those who gamble on a constant upwards line will lose out, those who are able to survive will be better off in the long run.
Its the concept of always having to have more that might suffer for a while.

[kievstar]

Banking crisis is going to go on for a long time if root cause not fixed - spend within your means and give credit to credit worthy customers.  Most banks in Europe are not paying there bills to suppliers right now.  Expect to see more banks folding soon.
Yesterday I had to interview 5 large Europe banks on why the company I work for should keep millions of dollars in there bank.  Only 1 bank said they do not need a wealthy helping hand.  These are big banks like Fortes which just got billions of help.  The Swiss bank was in good shape but ratios were worse this year than last.

When I was in Kiev this past weekend, Kiev is experiencing something they have never seen before.  Companies are starting to layoff employees because there salaries are to high.  Replacing them with lower paid employees or not replacing them at all.   

The problems in the USA are at a minor scale to what will hit the rest of the world. 

Stocks go up over the long term if your in good mutual funds - panicking right now and pulling money out is stupid.  Market goes up and down just need to ride it.  Eventually the USA will collapse just like all great dynasties.  People are not that smart if they think USA will always be a strong country.  But that could be 100 years from now.
 

[Faux Pas]

The bailout plan is basicly to take the money people have taken out of the bank and stock system back by letting it be paid by taxes.
Difference is that you do not get your tax dollars back.

Shadow I think thats only half right. The correct part is we'll never get the 700 B in tax money back. It in essence will dissipate. This isn't money or stocks that was withdrawn, this is 700 B in bad loans for real estate speculators and unworthy creditors. The largest sector of it is from the home mortgaging industry. It will not correct or even address the problem but apply a bandage on a gapping wound. Our politicians do not seem very interested in fixing the root cause. The industry fueled by greed for the last 8-10 years has made it possible to get endless credit for a signature. Where the money is I guess is a moot point. The bottom line is there is less than half of the 700 B debt in real property.

IMO, the bailout should not happen and the affected banks should fail. It is they're lending practices that dug this hole for them in the first place and burden shouldn't fall on the taxpayers. Yes, the economy for those taxpayers will take a blow but nothing unrecoverable. Banks should be allow to succeed and fail. That is the essence of the free market system.

I could however be convinced of a takeover of the affected banks but not a bailout.

[Ronnie]

Isn't there some Chinese character that is the same for "crisis" as for "opportunity?" 

Smart folks buy when everyone else is afraid, and they get afraid when everyone else is buying.  Whether stocks or real estate, the principle is the same.

[Ronnie]

Let's not lose sight of the fact the the FDIC already insures bank deposits up to 100k.  Depositors know that and if they put more than that in one account they do so at their own risk of course.

The best course of action for the government now is do let the market work out it's problems.  When home prices get low enough, buyers will come in and the liquidity problems will be resolved.  There are lenders who have money to lend (Ditech is still running ads for 5.5% fixed).  Banks will finance their own repo homes.  When I was in real estate back in the early 80s, we worked out alternative financing arrangements we never needed banks to close our deals.

Let the market work.

[ScottinCrimea]

People from the ground up have been living beyond their means for a long time now, depending on easy credit to finance it.  It was basically a pyramid scheme that finally crumbled and now as one said, "The tide has gone out and now we're seeing who's swimming naked".

Now the government comes along and says we have to give the banks $7 billion so they can continue to give more credit.  It sounds to me like the addict is having withdrawals and we want to give the pushers money to keep the withdrawals(no pun intended) away (at least temporarily).

I think it's a temporary fix that would have long term effects on the economy both due to continuing the bad credit habit, now with the assurance that if you screw up the government will bail you out, and due to the effect of $7 billion in additional government debt on the backs of the taxpayers.

As much as it may hurt now, let the market self adjust and like the addict deprived of his fix, once the initial pains are over it will come back better and cleaner than before.

Either we trust the free marked system or we don't.

[Faux Pas]

People from the ground up have been living beyond their means for a long time now, depending on easy credit to finance it.  It was basically a pyramid scheme that finally crumbled and now as one said, "The tide has gone out and now we're seeing who's swimming naked".

Now the government comes along and says we have to give the banks $7 billion so they can continue to give more credit.  It sounds to me like the addict is having withdrawals and we want to give the pushers money to keep the withdrawals(no pun intended) away (at least temporarily).

I think it's a temporary fix that would have long term effects on the economy both due to continuing the bad credit habit, now with the assurance that if you screw up the government will bail you out, and due to the effect of $7 billion in additional government debt on the backs of the taxpayers.

As much as it may hurt now, let the market self adjust and like the addict deprived of his fix, once the initial pains are over it will come back better and cleaner than before.

Either we trust the free marked system or we don't.

Scott

You are missing a couple of zeros in that figure it is 700 billion. But I agree with you, let the market work. The problem has been that the fox has been guarding the hen house. The bailout plan will give the foxes more chickens

[Ronnie]

It was interference in the market by Jimmy Carter and later by Bill Clinton that forced banks to make subprime loans to unworthy borrowers.

There's a lot of historical fact packed into this video..use your pause button and read the articles...

[youtube=425,350]http://www.youtube.com/watch?v=NU6fuFrdCJY&feature=user[/youtube]

[Ronnie]

You may also find this video to be very interesting....

[youtube=425,350]http://www.youtube.com/watch?v=3p1Wc2NFa3w&feature=related[/youtube]

[ScottinCrimea]

Scott

You are missing a couple of zeros in that figure it is 700 billion. But I agree with you, let the market work. The problem has been that the fox has been guarding the hen house. The bailout plan will give the foxes more chickens

I guess I just can't count that high.  :usdeyes:

Ronnie, some very interesting videos.  Why is this so different from how the media is presenting things? 

[Ronnie]

I guess I just can't count that high.  :usdeyes:

Ronnie, some very interesting videos.  Why is this so different from how the media is presenting things? 

Good question Scott.  Good question.

[Blues Fairy]

Why is this so different from how the media is presenting things? 

Yeah, a big mystery indeed! 

What really I can't get is why McCain is being such a wuss and would not fight against this horrendous bill.  Too old and tired?  Still hoping to remain friends with everyone (naively)? 

Looks like the whole thing was designed to intimidate him into collaboration and thus ruin his ratings with the voters.

[Faux Pas]

Yeah, a big mystery indeed! 

What really I can't get is why McCain is being such a wuss and would not fight against this horrendous bill.  Too old and tired?  Still hoping to remain friends with everyone (naively)? 

Looks like the whole thing was designed to intimidate him into collaboration and thus ruin his ratings with the voters.

Things are not as they seem. McCain actually was introducing legislation to keep just such an occurrence as the crisis from happening as early as 1998 (I could be wrong on the date) The subprime lending was a disaster in the making from the onset coupled with the fact that our legislators let it continue without proper checks and balances made the disaster imminent. His legislation at the time was shot down as not being politically expedient and attempting to deny low income families quality housing.

The question for McCain now is how to solve the problem that the subprime lending created. In his mind it is to bail it out.

[Faux Pas]

I guess I just can't count that high.  :usdeyes:

Ronnie, some very interesting videos.  Why is this so different from how the media is presenting things? 

Especially in an election year the ultra liberal media isn't interested identifying this as what it is, a democratic initiative nor the players involved most of whom are still the leaders in the democratic party

[Sculpto]

Come on now people.. Reagan de-regulated the banks that FDR regulated in the first place after the great stock market crash.

Please do not try to politicize these events as it will not help anyone to understand what is really happening.

It is part of the transfer of wealth.  It is a boondoggle being perpetrated by those in power, regardless of party affiliation.  Those with power want to keep their power.  Nothing less nothing more.  It is corruption in its purest form.

Remember who went on national TV and told us we need this.  Do you believe the "shrub" in the White House?  He cheated to win the first election, he used fear to win the second, he lied to the world to start the war and now he wants us to believe we will collapse as a nation and economy if we do not give Wall Street this 700 billion.  If you are buying into this I would like to show you some property I have just off the California coast.  I will sell real cheap. 

[Ronnie]

It seems to happen every four years that American voters are faced with choosing the lesser of two evils for president.  But of course it is the voters who put up the terrible candidates.

The republicans bypassed several outstanding candidates is favor of John McCain, a man who is stubborn, ill-tempered and impulsive.  His strongest suit is the fact that, as he said, "I look into Putin's eyes and I don't see a man we can trust, I see three letters...K..G..B."  I know of no other person in Washington who understands who V.V. Putin really is, or if they do, who has the guts to speak truth about him on international television. 

Yet McCain is gutless when it comes to speaking the truth about immigration, trade, ANWR, the GW fraud and the housing debacle, or maybe he just doesn't understand that he's wrong.  It's enough to make you pull your hair out.

Then there's BH Obama.  Schooled in Chicago-style politics, gets his seat in the Illinois Senate by getting his opponents removed from the ballot on a technicality, including the black female incumbent whom he would not have unseated otherwise.  Not only is BHO schooled in Chicago style politics but he is a true believer (along with Hillary Clinton) in Saul Alinsky style radicalism. 

Alinsky, a product of south Chicago, pioneered the concept of community organizing and taught that the ends of achieving power justified any means used to gain it, including deception, subterfuge, and outright fraud.   No one really knows Obama with the possible exception of his pastor and his wife. 

As Alinsky advocates in his writings, Obama will do or say anything to gain power.  Once in power, he will work to move America from the capitalist system that has made her great to a socialistic system that will destroy her. 

Obama says nice things like we need to renegotiate NAFTA to protect our jobs, but then lets Canadian officials know he doesn't really mean it.  He has an elitist's disdain for small-town Americans who believe in their Christian religion and their right to bear arms.  The leftists' tactics of ridicule and mockery of the regular citizen are the stuff of Leninism and modern-day progressivism.

So, how did we get ourselves into this situation yet again?  Look at our recent choices..

1988...Mike Dukakis or GHW Bush
1992...GHW Bush or Arkansas Gov Bill Clinton
1996..Clinton or Bob Dole
2000..W or Al Gore
2004..W or John Kerry
2008..McCain or Obama

Nowhere in the above list will you find anything approaching our best and brightest leaders, but they are the ones we offered ourselves.

We give our Congress a 9% approval rating but we return over 90% of the incumbents each and every time.  We have become a dsyfunctional society of our own making.  The country is headed for a schism between conservatives and radical socialists. 

It's all going to get uglier with time.

[Ronnie]

Come on now people.. Reagan de-regulated the banks that FDR regulated in the first place after the great stock market crash.

Please do not try to politicize these events as it will not help anyone to understand what is really happening.

It is part of the transfer of wealth.  It is a boondoggle being perpetrated by those in power, regardless of party affiliation.  Those with power want to keep their power.  Nothing less nothing more.  It is corruption in its purest form.

Remember who went on national TV and told us we need this.  Do you believe the "shrub" in the White House?  He cheated to win the first election, he used fear to win the second, he lied to the world to start the war and now he wants us to believe we will collapse as a nation and economy if we do not give Wall Street this 700 billion.  If you are buying into this I would like to show you some property I have just off the California coast.  I will sell real cheap. 

As I wrote above, cheating and lying to get power are nothing new nor unique to any candidate or party.  McCain may not cheat or lie but he will lose because he's not in sync with the heartbeat of his party.

One would think that the Republicans would be in favor of the bailout and Dems against, yet that appears to be slightly reversed.  Here we have Dennis Kucinich and Bernie Saunders on the same side as Jeff Sessions and Jim Demint.  Odd bedfellows and a symptom of the dysfunction in Congress.   We need to vote out all incumbents and start over.

[kievstar]

This bail-out if passed will not be good.  People need to learn a hard lesson.  You spend to much you may live in the street.  Or your in-laws. 

[Faux Pas]

Sculpto,

Where exactly was the politicizing? Was there something I posted that was or was untrue? Are you offended at the term ultra liberal? That term is quite appropriate in describing the national media in American society. I was merely giving honest answers to some honest questions and all in the context  of my personal opinion. For the record I consider myself squarely "middle of the road"

The deregulated banks have no dog in this hunt. They are immaterial. A "transfer of wealth", can you expand on this please? Your are correct in your statement about the corruption involved. It is nasty, it is deep and this is a textbook example of it's purest form. If you'd like to know more about who was/is involved in the corruption of this look to Obama's finance advisor and Obama's own involvement with ACORN and the Black Caucus.

Politicizing the issue would be a statement such as this;

Remember who went on national TV and told us we need this.  Do you believe the "shrub" in the White House?  He cheated to win the first election, he used fear to win the second, he lied to the world to start the war and now he wants us to believe we will collapse as a nation and economy if we do not give Wall Street this 700 billion.  If you are buying into this I would like to show you some property I have just off the California coast.  I will sell real cheap. 

[Ronnie]

A Wall Street expert who tells it like it is as to the ball-out.  "It doesn't make sense!"

http://money.cnn.com/video/ft/#/video/fortune/2008/10/02/fortune.mpw.whitney.bailout.fortune

[Sculpto]

Faux..
When I see finger pointing to one side or the other in this mess I see people trying to make a case for one or another political advantage.  I am not immune to it but I do not see the Wall street mess as partisan politically.   I do see it as the place in the world where people who produce nothing of value make more money speculating than they deserve.  Wall street speculators are merely a parasite on the hard work of real people.  And, the scam comes in when half the population of this country is convinced to get in on the game and then a very predictable collapse occurs.  Someone made off with all that cash and you can be sure it wasn't you or me.

The term Ultra Liberal does not offend me, except only that it be used correctly.  If you think the mainstream media is Ultra Liberal I suggest you come for a visit to San Francisco so I can show you what Ultra Liberal really looks like.  The mainstream media is anything but Ultra Liberal.  They are part of the system that is supposedly failing.  They get a portion of their advertising dollars from those very same banks and investment firms which are now in collapse.  Editors "balance" their journalistic editorial responsibilities with the financial realities of running a newspaper or tv station every single day of the week.  Some other places in the world practie governmental censorship, but, we have a much more sophisticated system of self censorship that has the same net result. 

I must disagree that my comment about GW was politicizing anything.  I am not advocating for any candidate relative to the BLATANT LIES the current administration has fooled our country and most of the world with for the last 8 years. 

The transfer of wealth... every day we are sending millions/billions to two places in the world, the Mideast for the oil and China/India for the products that fill the shelves at WalMart.  Our industrial jobs disappear and are sent to China, India and a host of other low labor cost countries.  At the same time the factories that continue to exist in this country are put under ever increasing pressure to be more productive because there is a perception that the only way to compete is to produce more per dollar of wages spent than is possible in the low wage countries.  It is a never ending cycle that is slowly bankrupting our country.  Additionaly there is simply just a limit to how productive any given worker can be, no matter how much technology he has at his fingertips.  A dog chasing its tail comes to my mind as I comtemplate this.  Its funny at first but eventually you begin to pity the stupidity of the dog which itself eventually becomes exhausted from chasing its tail and will collapse.

Globalization of production and trade only makes sense in a theoretical fantasy world where humans are reduced to units of productive output and success is measured only in profit margins for fat cats at the top of the pyramid.  This is not a sustainable business model and will eventually result in a very destructive war as population growth and available resources can never balance themselves. 

There is a  "localization" movement beginning here the Bay Area.  It starts with Berkeley supporting a fast growing alternative fuels system.  It is reinforced with San Francisco voters not allowing Home Depot and other massive chains to set up shop in our city.  It continues with people CHOOSING to buy their vegetables from local organic farmers at any of the farmers markets inside the City or in the outlying areas.  This movement was gaining momentum before the mess on Wall Street started and has suddenly been pushed into the spotlight all around here.  This is grass roots voting with dollars.  If "you" enjoy your current lifestyle I suggest the ONLY way to stop the march of globalization and the looting of our national wealth is not to vote in or out any particular leader or party, but, to vote with your dollars and make these political idiots completely obsolete and irrelevant. 

We have in this country become too accustomed to easy money, easy "success", the arrogance of thinking we are the best in almost everything.  The world is changing and fast.  It is simply reality.  We have been "King of the Hill" for a long time.  Everyone wants to kill the king.  It is HUMAN NATURE. 

And, to make one overtly political comment regarding the elections.. I think there is only one thing that people should be looking at to make their choice.  One candidate wants to talk and create alliances, the other candidate wants to force our will on the world.  So, you decide what kind of world you want to live in.  One in which we cooperate with EVERYONE to save the whole world from self destruction, or, a world in which we could give a damn what happens everywhere else as long as we keep our dominant position for as long as possible and screw the consequences.  I would prefer that we lead a new age of enlightenment than spend the next 100 years fighting wars with an ever increasing number of enemies.

[BC]

FACT:  No one makes money when the market is flat.

FACT: The more market turbulence that exists, the more very few make very much more.

IMHO this whole 'financial crisis' deal is a ploy.

Evidence: Look at the Wachovia/Citibank/Wells Fargo deal.

Yes there is a CREDIT Crisis and now the guv'mt has signed on to pumping another 700 billion on top of already 300+billion already spent at taxpayer risk.  BTW, 700 billion is probably a drop in the bucket and will not stave off the depression the US is already in.

There is a huge difference between 2 and 15 billion.... http://online.wsj.com/article/SB122303190029501925.html

Can anyone explain that? - especially when the deal was done without 300 billion risk to the taxpayer?

I'm beginning to think that the 'financial crisis' is instead a 'financial coup'.

Some very smart folks are at work.. and the 'gummnit' is the dummy.

[Sculpto]

BC, I agree with every word except the government is not a dummy in this.. they are a partner.  it is simply the politics of corruption and fear at work.