1.2 trillion was lost yesterday!
1.2 trillion was lost yesterday!
you really are clueless...
i personally like how picked 3 companies that have been going out of business for 20 years in Ford, GM and Chrysler. you really went out on a ledge for that one didn't you...you're part of the problem...well that is unless you own one of those ameircan built cars..
if 98% of american's can't understand the complexity of it all why is it that you can? if you're that damn smart you better be extremely rich and if you are why are you on letsrun all the time????
personally i don't want ~600 congressman whom are mostly all lawyers and life long politicians deciding what to do in a financial crisis...what the f**k do they know?
hey donkey...the ecnomony goes through cycles this isn't anything new...
we lose jobs we gain jobs
OMG the market went down yesterday! holy crap its never done that before...oh wait what about that day what was it...october 19, 1987...market was down 22.6% in ONE DAY...guess what we recovered...
You seem to say that a smaller bail out will be ineffective and that a "market-based" solution will not be effective either. Is that correct?
Is this problem also a result of a poor understanding of risk or perhaps a poor understanding of low-probability events and their disastrous consequences? For some time now, financial cats have been writing about how well risk is distributed through the markets - I think to avoid this sort of event, and yet here we are. Do I understand that correctly? Thanks!
Keith Stone wrote:
[quote]:
Give up on the fake alarmist talk.
And you keep up your act, along with the rest who think they are "sticking it to the man".
You have no clue how bad the credit markets are or how fast this can hurt. None. Those with the "main street" values you espouse have only felt minor ripples.
If nothing is done, the pain will come in a rush not a trickle. Wait till the first payroll isn't met on time.
Then you be crying again how "the people' have been wronged.
El Gato Javier wrote:
You seem to say that a smaller bail out will be ineffective and that a "market-based" solution will not be effective either. Is that correct?
Is this problem also a result of a poor understanding of risk or perhaps a poor understanding of low-probability events and their disastrous consequences? For some time now, financial cats have been writing about how well risk is distributed through the markets - I think to avoid this sort of event, and yet here we are. Do I understand that correctly? Thanks!
I'm not saying that a bailout would be effective for sure, but it might slow down or mitigate the unevitable to an extent. If this saves a few million jobs, then it is a good thing. I'm more certain about what happens if the government just stands there and watches. I'm all for the free markets, but we have lost our collective heads with debt in the last 10-15 years. The market-based solution will almost certainly lead to a crash in the market.
The truth is that America has to go through a very big unwinding process ... the same sort of process that LTCM and the Feds went through in 1998 ... but on a far grander scale. LTCM was leveraged to the hilt. So are we now, as a country, as corporations, as individuals. We carry so much debt that the slightest negative event can push us over the edge. This is what we are seeing now, with all of the defaults, the bankruptcies, etc. This would be OK still, if it weren't for the CDS problem that will drag down innocent companies along with the guilty. THAT is what Paulson wants to say, but can't, for fear of causing more panic in the markets. He is probably fine with companies that took too much risk going down the tubes, but cannot in good conscience stand by while companies that did it right also wind up failing.
A bailout is meant to buy time more than anything - time to deleverage. Our debt levels are so high that it will take years to unwind even with a bailout. Small risks are in fact well distributed throughout the market. The big risks are not. The fatal flaw in the CDS market is that companies that have been around for 50-100 years won't fail. That works fine, until they start to fail. Because of the thousands of huge CDS contracts, companies are tied to the fates of the others. As that snowball rolls downhill, it takes more and more companies with it. Paulson is trying to stop the snowball.
No one is really ever ready for the big risks. Imagine a scenario in which a Katrina-type hurricane devastated a major city, at the same time that the West Coast gets a 8.7 magnitude earthquake in San Francisco. It's unlikely, but when it happens, you will see many insurance companies crumble, because they didn't factor in the "long-tail" events.
There are people who saw this coming for many years, but they were shouted down whenever they tried to voice their opinions. No one likes a party pooper during a good time, do they? They were right. The trick now is to get Americans, who feel they are entitled to anything their neighbor owns, to change their mindset to saving, not spending. Only a true depression will make that happen.
One more point. As a free markets guy, there is a large part of me that says "the hell with it, let the market sort it out, it serves these idiots right for not thinking." But the likely ending for a do-nothing solution is depression, sky-high unemployment, and chaos. We are just too leveraged. My heart tells me that much of that might be avoided with intervention, even though doing it will absolutely crush the dollar to smithereens. I don't think the market is failing now either. It is doing exactly what it should do when excesses exist. It is people who have failed. By failing to think sensibly, we have gotten ourselves into a predicament in which there is no easy way out. There are only varying degrees of pain.
*inevitable
THe fact that the DOW gained 200 plus points at this time just goes to show this bailout is nothing but a sham to line the pockets of Wall street people so many Americans can continue buying stuff they cannot afford. Was 7 percentof the American economy destroyed and suddenly rebuit overnight? Americans with jobs that actually provide goods and services have nothing to fear as there will always be a market for their products
Neuropsychiatrist wrote:
THe fact that the DOW gained 200 plus points at this time just goes to show this bailout is nothing but a sham to line the pockets of Wall street people so many Americans can continue buying stuff they cannot afford. Was 7 percentof the American economy destroyed and suddenly rebuit overnight? Americans with jobs that actually provide goods and services have nothing to fear as there will always be a market for their products
Its not just about wallstreat. Its about the credit market.
There is still plenty in the well.. yes.. short term rates at 5-6%... but what will happen when the well gets to the bottom and we see short term rates of 15-20% and long term rates even higher. How you gonna afford those house payments. Screw the money for a car bills, how you gonna pay for your groceries...
Its not a f-ing bailout, its a federal loan which has to be paid back. The government was buying the bad dept.
Whats gonna happen when the supermarket stops taking credit card and goes cash only, sure its a year or so off but its time we start making fixes.
how are county hospitals gonna fund opperations when cash on hand is only 3 days.
Do you seriously think this problem is just gonna fix itself?
wallstreaker wrote:
Its not just about wallstreat. Its about the credit market.
There is still plenty in the well.. yes.. short term rates at 5-6%... but what will happen when the well gets to the bottom and we see short term rates of 15-20% and long term rates even higher. How you gonna afford those house payments. Screw the money for a car bills, how you gonna pay for your groceries...
Its not a f-ing bailout, its a federal loan which has to be paid back. The government was buying the bad dept.
Whats gonna happen when the supermarket stops taking credit card and goes cash only, sure its a year or so off but its time we start making fixes.
how are county hospitals gonna fund opperations when cash on hand is only 3 days.
Do you seriously think this problem is just gonna fix itself?
How does this credit crunch work? Didn't the Fed just put $620B more into the market? So, how does that work? Does the Fed loan $620B to banks at the prime rate. Then those banks loan that money out at prime+X%, and then eventually that money gets to a local bank and you finance a car at prime+X+Y%? So, how does the credit market dry up, if the Fed just added $620B to it? Is there an article that explains this somewhere?
wallstreaker wrote:
Its not a f-ing bailout, its a federal loan which has to be paid back. The government was buying the bad dept.
Whats gonna happen when the supermarket stops taking credit card and goes cash only, sure its a year or so off but its time we start making fixes.
how are county hospitals gonna fund opperations when cash on hand is only 3 days.
Do you seriously think this problem is just gonna fix itself?
Once again, another wall streeter claims we only have two doors-- devastation or bailout.
How about a door C in which the source of capital (i.e., the gov't) negotiates the best terms possible in exchange for that capital?
donkey panis wrote:
Did you see what happened to the market yesterday? That doesn't worry you?
Yes, and of course it does.
Have you been paying attention to the job report numbers for the last few months?
Yes, and how exactly is $700B going to stop people from shipping jobs overseas?
Fear has spread from the credit market to the stock market. People realize that without people's ability to get a car loan or mortgage and business not being able to get a loan to expand unempolyment will increase. With less confidence consumer spending decreases and consumer spending is responsible for about 2/3 of the economy's growth. Something needs to be done to restore confidence in the markets. Doing nothing doesn't instill confidence.
Runninga round like a chicken with it's head cut off doesn't instill confidence either, but that seems to be the model of the day.
Do you realize the proposal had a provision against golden parachutes?
Yes, but bailing out the people that caused the problem will encourage them to repeat this again in 2, 3 years, etc. This is my main sticking point, the proposal still bails out and sets a precedent for the next time. Basically we're saying if you f**k up small, you're on your own, if you f**k up big time we'll bail you out. Don't you see the problem with that?
Keith Stone wrote:
Yes, but bailing out the people that caused the problem will encourage them to repeat this again in 2, 3 years, etc. This is my main sticking point, the proposal still bails out and sets a precedent for the next time. Basically we're saying if you f**k up small, you're on your own, if you f**k up big time we'll bail you out. Don't you see the problem with that?
Exactly. It is like discharging the debt of a consumer and then giving them a new credit card the next day.
IF things do blow up, Wall Street will have done more harm to the U.S. than any bunch of plane-flying jerks. Yet The Bailout that failed yesterday still paid CEO's a king's ransom to avoid having to "abrogate contracts."
Heck-- how about treating them and their incompetent minions like the true threat that they are?
The credit market has gone awry and this is the "SHOCK THERAPY" that may be necesary like whan National economies move from state owned to privately owned as in Russia or China. Credit should be given to those who have a good chance of paying it back. If the bailout goes through, this will allow the credit market to further balloon in the absence of "Moral Hazard" and we ill be in for a bigger collpase in the future. Wall street basically duped the American public into borrowing allthis money, took off with a portion of this borrowed money as an annual bonus in Cash and left the fiscally repsonsible taxpayer to foot the bill. All the talk about banning Golden parachutes is a joke. The CEO's alrady have their bonues from previosu years as well as middle management.
remember when the tech bubble burst and Companies collapsed and people lost their jobs. the tech people pulled themsleves together, regrouped and The tech industry is still intact and stronger than ever. Youdidn't see them crying to the federal government for a bailout (it is a bailout...you just called it bad debt....and it is highly unlikley that the Government will make money on this bailout) You didn't see the Tech people spread fear that the the American economy was goin gto collapse or the Tech indusrty will move to China or India.
4runner wrote:
Keith Stone wrote:Yes, but bailing out the people that caused the problem will encourage them to repeat this again in 2, 3 years, etc. This is my main sticking point, the proposal still bails out and sets a precedent for the next time. Basically we're saying if you f**k up small, you're on your own, if you f**k up big time we'll bail you out. Don't you see the problem with that?
Exactly. It is like discharging the debt of a consumer and then giving them a new credit card the next day.
IF things do blow up, Wall Street will have done more harm to the U.S. than any bunch of plane-flying jerks. Yet The Bailout that failed yesterday still paid CEO's a king's ransom to avoid having to "abrogate contracts."
Heck-- how about treating them and their incompetent minions like the true threat that they are?
Well put....and on top of that
Exactly. It is like discharging the debt of a consumer and then giving them a new credit card the next day...and also borrowing money from people who don't carry a balance and paying the CEO of the credit card company so the we can discharge the debt again and issue a new card again...
Incidentlly...I am not Conservative...I think education and decent healthcare is a fundeamental human right...owning your home and maxing out your credit cards is markedly NOT Human right but much of America thinks it should be.
the market was primed by Paulson for a sharp sell off if the bill didnt pass.
you look all ashen, hold emergency mtgs all hours of the day and nite tell America its flush time if this doesnt go well a semicrash is a given.
my only question yesterday was what exactly ARE were expectations for the bill given how hard the selloff was--even advocates acknowledge its not a perfect solution.
it was a scary sell off given its all sell side action since theres no shorting on the fin sector till Thursday.
today I bought CME at the open (352) and BBT soon after (35.66), CME is a stock I know well from trading and BBT was one of the most oversold yesterday. Both are up 15% or so today. I will likely cash out close to mkt close unless theres a huge across the board rally or some new news that could carry over till tomorrow.
Neuropsychiatrist wrote:
Incidentlly...I am not Conservative...I think education and decent healthcare is a fundeamental human right...owning your home and maxing out your credit cards is markedly NOT Human right but much of America thinks it should be.
I don't know how or where I stand on the political scale, but the sense of privilege in these posts and on Wall Street is amazing.
Wall Street talks about this like it is a video game-- just pump in a few more quarters, hit reset, and they'll keep on playing. There are real live people with real live jobs who already have been hurt and are going to be hurt even more by what's happened on Wall Street.
Put them on the GS scale. At least when some government official buys $400 toilet seats, he's only making 40k$ a year...
no crap... i don't think anyone (including those on wall street) see a bailout as something that should be done solely to help out those on the streetpaulson and bernanke know that banks and the main street economy are connected... they don't want real live people (as you call them) hurt anymore eitherpeople suprise me... the bridge is on the brink of falling down, the engineers know the best fix to keep it from falling yet on the bridge are people who don't know diddly about the situation shouting don't listen to the engineersnot until the bridge falls will they see how bad that sucks
4runner wrote:
[quote]Neuropsychiatrist wrote:
Wall Street talks about this like it is a video game-- just pump in a few more quarters, hit reset, and they'll keep on playing. There are real live people with real live jobs who already have been hurt and are going to be hurt even more by what's happened on Wall Street.
You're right, the CRA was racist. It said: "Give minorities loans even if they can't pay them back."
Doesn't get much more racist than that.
"It was only when all the money started pouring in did mortgage brokers start doing anything they could to get people into loans."
And you still can't connect the dots? No CRA=no pouring in of money=no financial crisis.
Boy, that was hard.
Learn something people:
http://edition.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html
anEconomist wrote:
people suprise me... the bridge is on the brink of falling down, the engineers know the best fix to keep it from falling yet on the bridge are people who don't know diddly about the situation shouting don't listen to the engineers
not until the bridge falls will they see how bad that sucks
So you KNOW that giving Paulson $700 billion to run the Wall Street investment banks is going to keep the bridge from toppling? Are you sure he's not going to need twice that amount? Or half or much less than half of that amount? I respect your knowledge of economics, but many valid objections to the current plan have been presented, not the least of which is that the massive weight of $700 billion could be what topples the bridge. How would that be for irony?