Government Bailout
- Thread starter 004Gunner
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I think it's going to be bad, but not like the Great Depression. Do you not feel the rumbling in the ground? That's all of the people that lived through the Great Depression turning in their graves when all of these journalists and politicians compare it to what they went through.
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Uneek
Super Moderator
My opinion...
If one's nearing retirement, hopefully they have other funds and cash tucked away outside of the market and hope the market rebounds in a couple years.
For those who have to work for many many more years, time is on your side. The market will bounce back, it's just going through it's cycle. The market hasn't been down over any five year run historically.
BUT on the topic of bail out, there shouldn't be any... it's all greed, execs are walking away with golden parachutes. $11 million severance package for the WaMu CEO and three weeks on the job. Many of us won't have $11 million over our entire working careers.
I saw this coming, with the 6/1 ARM loans and interest only loans, it was a matter of time that it would catch up to people keeping up with The Jones. I have no idea why a long term home owner would go for a 6/1 ARM or interest only. Those are for speculators and house flippers.
If one's nearing retirement, hopefully they have other funds and cash tucked away outside of the market and hope the market rebounds in a couple years.
For those who have to work for many many more years, time is on your side. The market will bounce back, it's just going through it's cycle. The market hasn't been down over any five year run historically.
BUT on the topic of bail out, there shouldn't be any... it's all greed, execs are walking away with golden parachutes. $11 million severance package for the WaMu CEO and three weeks on the job. Many of us won't have $11 million over our entire working careers.
I saw this coming, with the 6/1 ARM loans and interest only loans, it was a matter of time that it would catch up to people keeping up with The Jones. I have no idea why a long term home owner would go for a 6/1 ARM or interest only. Those are for speculators and house flippers.
TheBlueWave
New member
Uneek said:
And that's where the problem is. I'm all for de-regulation, but if Americans always have to have the very best, whether they can afford it or not, then we need to regulate ourselves to keep us all from ending up on the street.
Sad, sad situation going on right now for lots and lots of people.
TheBlueWave said:
De-regulation is the enemy right now, it's a big part of what got us into this mess. I'm not talking about giving out bad loans (which was already on the books as unacceptable, just not being enforced by the Bush Administration). The part that got us in trouble was people selling portions of bad debt to huge financial firms that were so far removed from the actual "security" that things went to hell in a hand basket fast. Then we have that dolt, John McCain, going to Washington and politicizing the whole thing. What a mess!!
TheBlueWave
New member
SonRunner said:
De-regulation would be fine if people wern't greedy/shady, you know what I mean. Because Americans are so stupid when it comes to money, mainly living off credit and not saving anything, regulation, unfortunately, is sorely needed.
I mean, if you have no down payment and shaky credit, you don't belong in a house, plain and simple. And, if you make $50,000 a year, you shouldn't be able to get a $300,000 mortgage with no money down. One would think that a non-regulated system would see that, but Americans are too stupid to figure this out (not just talking about the lendees, but also the crazy-assed lenders).
TheBlueWave said:
Exactly. So here's something to consider. The median house hold income in the United States is about 50k. The standard rule is you get a mortgage for 2.5 times what you make. That would be $125k for most people. Now look at what the average home price is... you'll see we have a long way to go before prices really reflect what people can pay. It's going to get rough.
CJ3Flyr
Super Moderator
TheBlueWave said:
:iagree: In fact I would take it touch farther. I don't care whether you're talking about Wall Street, Tort Reform, Tax Reform, Health Care, Energy Policy, International Treaty issues, anything to do with your family etc, it doesn't matter; greed, selfeshness and stupidity are at the root of all problems.
The stupidity manifests itself in only one area, no thought about the consequences/repercussions. There's plenty of IQ used to create the scheme or perpetuate the act. The medium and long-term consequences are never considered. It's really quite sad and it's the good, normal people pay for it.
rook
New member
I don't think there is a taxpayer who "wants" to pay to bail out those who made poor decisions. From the consumer to the fund manager, every layer of the credit market was somewhat corrupted. Now, credit markets are restricted and banks are reluctant to lend to each other. The credit crisis impacts so many people, the first impact was felt by those directly related to the housing market. Realtors, contractors, mortgage brokers, even sales at home improvement stores were impacted.
When bank write downs came, confidence dropped, leading some to withdraw deposits from poorly performing banks, e.g. the recent failure of WAMU. The shockwave spread throughout the banking industry, then you started to see the effect on the market. The dow, s&p and nasdaq all took a $hit on monday, only to make a rebound by nearly 500 points today, mainly fueled by speculation.
My employer supports the bailout, to free up credit markets and let the borrowing continue. I am not sure I favor throwing in 700 bn for fear that it is analogous to putting a band aid on a bullet wound. I will be attending a very interesting conference tomorrow, regarding consumer spending and the credit impact. I should have a good idea how the " average american" will fare in the weeks and months to come.
When bank write downs came, confidence dropped, leading some to withdraw deposits from poorly performing banks, e.g. the recent failure of WAMU. The shockwave spread throughout the banking industry, then you started to see the effect on the market. The dow, s&p and nasdaq all took a $hit on monday, only to make a rebound by nearly 500 points today, mainly fueled by speculation.
My employer supports the bailout, to free up credit markets and let the borrowing continue. I am not sure I favor throwing in 700 bn for fear that it is analogous to putting a band aid on a bullet wound. I will be attending a very interesting conference tomorrow, regarding consumer spending and the credit impact. I should have a good idea how the " average american" will fare in the weeks and months to come.
Jeff Kleb
New member
Did anyone ever stop to think that it was the government who caused much of this in the first place?
I suppose much of the blame goes back to the early 1970s when we abandoned the 'Gold Standard' (Nixon Era). After that, there have been several government "guarantees" to mortage companies that were all too eager to lend money to people who were far fronm credit worthy. (Hey, when the financial institutions can 'privatize' their profits and 'socialize' their losses, why not?)
:bash:
It took a long time to get into this mess, and it is going to take us awhile for our economy to extricate itself. Turning over nearly a trillion more dollars to people who played "fast & loose" with our money in the first place is NOT a good thing.
If this bailout goes through and is not done correctly, the long-term pain is going to haunt our children and grandchildren. Just think of what will happen when the government has to monetize the debt. Hint: US currency will resemble Monopoly money.
Jeff Kleb said:
Indeed it will. This is a concern of mine over the bail out. If we keep low interest rates and keep injecting money, and printing money, our dollars will be worthless. Half of me thinks the only way out is to suffer. Perhaps the bailout will only prolong the problem? I guess it remains to be seen.
From the sound of what I'm hearing on the news and reading about, the debt will only be "secured" by the United States gov't, kind of like FDIC. So the true cost won't be all of 700 billion, like the Bush Administration wanted, but still a lot.
Uneek
Super Moderator
The financial sector could've fixed this themselves... all they had to do was rewrite the loans and rework the interest rates that a lot of borrowers could no longer afford. This would've kept borrowers from defaulting to a certain extent and they would continue making payments.
I'm with those who say, let it fail. As the analysts love to say "the market will correct itself." Let the banks become property owners and have them keep a few millions homes on their balance sheet.
I'm with those who say, let it fail. As the analysts love to say "the market will correct itself." Let the banks become property owners and have them keep a few millions homes on their balance sheet.
TheBlueWave
New member
Through all this I'm glad I already have my house and that I'm not going to retire for at least 30 years.
I plan to live frugally through this whole fiasco so when things come back to normal and grow, I will be in good position to prosper.
I plan to live frugally through this whole fiasco so when things come back to normal and grow, I will be in good position to prosper.
Jeff Kleb
New member
TheBlueWave said:
:clap:
"A very wise mind you have, young Skywalker." {done in a Yoda voice}
As my grandpa once said, the best way to get rich quick is through forty years of hard work and prudent investing. Seems as though he is still right on the mark after all these years.
:biggrin2:
