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rforsythe
Mon Sep 29th, 2008, 12:35 PM
$700B no more!

"Fear swept across the financial markets Monday, sending the Dow Jones industrials down as much as 705 points, as the financial bailout package was defeated by the House."

While I'm generally against bailing out asshats who caused this, I'm on the fence about what this will ultimately mean. Gonna be interesting, to say the least.

McVaaahhh
Mon Sep 29th, 2008, 12:40 PM
Gonna continue to be an interesting couple of years.

I really hope that the asshat CEO's of these mortgage companies are not walking with millions while the gov (read: taxpayers) bail out their companies to try and prevent the absolute collapse of our economy.

There better be some hell to pay for these fuggers. :guns:

Snowman
Mon Sep 29th, 2008, 12:44 PM
May I suggest removeing all your money out of your 401Kd, taking the 15% loss and buy gold...

dirkterrell
Mon Sep 29th, 2008, 12:56 PM
The whole bailout concept makes me very uneasy. These companies gambled in very risky ways and lost. Deal with it. That's the nature of a free market. This whole "We have to act fast! Right now! We don't have time to think about it!" approach set off my bullshit detector something fierce.

I don't have a lot of sympathy for people who get burned with risky investments. They act like they are economic geniuses when they hit it on the upside but there is always a downside coming and most of them don't have enough sense to know it. The Internet bubble, house flipping, etc all examples of how you can get burned if you don't know what you're doing.

Dirk

rybo
Mon Sep 29th, 2008, 12:56 PM
May I suggest removeing all your money out of your 401Kd, taking the 15% loss and buy gold...

You may, but I don't think it's what I'll be doing. Gold is near an all time high at $900 an ounce it only stands to decrease in value as the financial markets recover (which will happen)

IMO - the better plan at this moment if you have some extra cash is to invest it in a Mutual fund or a stock that is a historically strong performer. There are a bunch of these out there right now that are (again IMO) undervalued and a good buy.

A bailout IS going to happen, just not under this particular plan. 700B IS going to get spent to save wall street, the real question is how much oversight is there going to be in allowing the plan to take effect. Once that happens the dip that the market took today will be replaced by a bump of equal or greater size and eventually the market will settle in the middle.

Devaclis
Mon Sep 29th, 2008, 01:01 PM
1. Go to work

2. Earn your money

3. Spend your money on local goods

4. ????

5. Profit

rybo
Mon Sep 29th, 2008, 01:02 PM
4. ????


This really is the mystery step, isn't it!

puckstr
Mon Sep 29th, 2008, 01:04 PM
Buy Guns and shit loads of AMMO

Snowman
Mon Sep 29th, 2008, 01:09 PM
You may, but I don't think it's what I'll be doing. Gold is near an all time high at $900 an ounce it only stands to decrease in value as the financial markets recover (which will happen)

IMO - the better plan at this moment if you have some extra cash is to invest it in a Mutual fund or a stock that is a historically strong performer. There are a bunch of these out there right now that are (again IMO) undervalued and a good buy.

A bailout IS going to happen, just not under this particular plan. 700B IS going to get spent to save wall street, the real question is how much oversight is there going to be in allowing the plan to take effect. Once that happens the dip that the market took today will be replaced by a bump of equal or greater size and eventually the market will settle in the middle.Yea your rigth gold would be a bad move... So can any here give us some concrete places to move our 401K money into?

dirkterrell
Mon Sep 29th, 2008, 01:13 PM
Yea your rigth gold would be a bad move... So can any here give us some concrete places to move our 401K money into?

Depends on when you plan to retire. :) For my diversified, long-term approach this drop in the markets is a good thing.

Dirk

~Barn~
Mon Sep 29th, 2008, 01:13 PM
Bond funds.

Magnum
Mon Sep 29th, 2008, 01:20 PM
I feel that congress says their voting for the American people, well let me see the numbers on the poll.......Oh I can't see it, yeah, because there isn't one. It's a freaking power trip by the congress men and women!!!! I don't think the average ''main street'' consumer understands the consequences if this bill does not pass.

In short, once these bad assets are bought by the govie, audited, scrubbed, re-packaged with proper ratings and guaranteed by the govie they will be bought and the profit will be sizable. I can only hope that the govie will be honest about the profits and cut each tax paying American a check for their slice of the pie.

This whole situation just sucks ballz, and I hope all the companies wanting to give credit to the people who prove they cannot manage their money learned a lesson, oh wait they did, most of them are OUT OF BUSINESS now. Unfortunately that left CEO's with big fat bank accounts and ''main street'' with far less jobs!!!

80/20 Stated W2'd with a 620 fico and 3% seller paid closing costs.............ah-ha-ha-ha....give me a break!!! I think some wholesale lenders would even allow below a 620 :shocked:.

:banghead:

Sortarican
Mon Sep 29th, 2008, 01:23 PM
1. Go to work....2. Earn your money....3. Spend your money on local goods....4. ????.....5. Profit

4. STEAL UNDERPANTS!

dirkterrell
Mon Sep 29th, 2008, 01:27 PM
4. STEAL UNDERPANTS!

I thought your #4 was "bet Rybo your entire 401K on the outcome of the MotoGP championship?" :)

Dirk

rybo
Mon Sep 29th, 2008, 01:34 PM
Yea your rigth gold would be a bad move... So can any here give us some concrete places to move our 401K money into?

Unless you're planning on retiring in the next 2 years I'd probably leave it where it is. I like to think I'm a pretty savvy investor, and I do have some individual stocks in my portfolio, but I've been investing 19 years and I've beaten my 401K once and beaten my small list of mutual funds once. 2X in 19 years I've beaten the funds managers at picking the winners. I've lost WAY more times than that.

Treasury Bonds are a safe, but low yield investment that really only pay out over the long haul. Commodities (gold, silver, grain etc) have the same risks associated with them as individual stocks do.

To put it in perspective, if we say your 401K is invested in a diversifed way, then it will roughly follow the market. As of right now the market is down 7%. You will take a 15% hit (minimum) by ditching out of your 401K early, lose whatever matching funds your employeer has put in (assuming that you aren't highly vested) and then pay income taxes on that money at the end of the year (assume about 20%) and then pay some fees to re-invest it. Net loss, 30+% in one move.

My advice is to stick with what you've got, and if you can increase your contribution to it. The currently depressed market is a good thing for people who invest now and plan on a 20 year return.

These are all just my opinions, I'm not a certified financial advisor or anything like it. Just a guy who's done some investing over the years.

s

Devaclis
Mon Sep 29th, 2008, 01:48 PM
Cut and run causes problems when it is perpetuated throughout the market in large numbers. The advice given by the smart finance managers has always been to leave your investments where they are in a time of major market fluctuation.

DFab
Mon Sep 29th, 2008, 01:53 PM
This whole "We have to act fast! Right now! We don't have time to think about it!"
"The Shock Doctine" http://en.wikipedia.org/wiki/Shock_doctrine

Wait for a crisis, real or perceived, and use it to push through policies that would normally be very unpopular.

I too would like to see these morons choke on all the bad debt they bought, but everything I've read says that the consequences of not bailing them out to the global financial system would be really, really bad. A big depression, sky high unemployment, etc. etc.

My employer just switched benefits providers (401K along with it). I dumped mine into the money market option in the new 401k for the time being. I don't know if this is a good idea but I figured a guarantee of a small return is better than continued -10% returns. My 401k is quite small though.

Devaclis
Mon Sep 29th, 2008, 01:56 PM
do you think, with the greater ease of mass communications (the interwebs) that a depression could arise from this? Mass layoffs company closures, life savings lost, the dollar loses all value, soup lines, homeless middle class, that sort of thing?

Snowman
Mon Sep 29th, 2008, 02:07 PM
Given that I started out to retire at 65, then saw it go up to 68 and now it’s 70 (and the way I ride sometimes) I really don’t think I’ll make it to retirement. Unless of course they preserve my head in a bottle at some point.

Let me just state that my knowledge about markets only rivals my knowledge about handguns.

However, why wouldn’t you move funds from a volatile commodity (stocks) into more stable ones (at this time), just to ride out the storm, saving you more money for when the stocks hit bottom so you can buy? Wouldn’t doing nothing lose you more money in this case?

Nick_Ninja
Mon Sep 29th, 2008, 02:12 PM
Given that I started out to retire at 65, then saw it go up to 68 and now it’s 70 (and the way I ride sometimes) I really don’t think I’ll make it to retirement. Unless of course they preserve my head in a bottle at some point.

Let me just state that my knowledge about markets only rivals my knowledge about handguns.

However, why wouldn’t you move funds from a volatile commodity (stocks) into more stable ones (at this time), just to ride out the storm, saving you more money for when the stocks hit bottom so you can buy? Wouldn’t doing nothing lose you more money in this case?


My head was preserved in a bottle of Sailor Jerry's Rum this weekend in a dire attempt to dodge this financial crisis :drink: :D

Devaclis
Mon Sep 29th, 2008, 02:16 PM
Time to purchase a LOT of foreign currency?

dirkterrell
Mon Sep 29th, 2008, 02:16 PM
... when the stocks hit bottom so you can buy?

If you can reliably predict that time, you won't need to worry about retirement. :)

Dirk

rforsythe
Mon Sep 29th, 2008, 02:18 PM
DOW is down over 770 points this afternoon...

On the plus side oil is also down $10/barrel, so maybe congress finally lowered gas prices. :roll:

mclarke
Mon Sep 29th, 2008, 03:39 PM
The only stock that performed well today.... Campbells Soup....

Snowman
Mon Sep 29th, 2008, 03:46 PM
The only stock that performed well today.... Campbells Soup....I figure Jack Daniels and Yeager will do well tomorrow…

jbnwc
Mon Sep 29th, 2008, 03:48 PM
As a financial trainer, I have to agree with RYBO's advice. It's quite good advice for most everyone.

Snowman - Pulling out of stocks would have been a great idea a year ago. Right now, it is possibly the worst thing you could do. If you look at your 401k, you should see a column labeled "unrealized gains/losses". Right now you have not 'realized' any of the losses that occurred today. Technically, you are not hurting at all until you SELL. If you transfer all of your stocks into bond funds tomorrow, you will have 'realized' today's huge loss and just kicked yourself in the butt.

Also, about bond funds - interest rates are at all time lows and WILL GO UP. As a rule, interest rates have an inverse relationship with bond prices. When interest rates go up, bonds will go down.

I feel like I have partial responsibility for all of this mess because I didn't make much of an effort to educate people outside of my immediate circle of friends(who are all sitting pretty right now). It wasn't just a few CEO's who caused all of this. Much of the problem was caused by millions of average people who got into mortgages that they did not understand. Mortgages that were sold by people who didn't understand them, either. If housing prices had continue to skyrocket, these average people would all be sitting pretty right now. That isn't the only problem, but a big slice of it. Other problems were caused by new and increasingly complex securities that no one seemed to understand or know how to value.

PLEASE - do not panic and sell stocks right now!! You will only be kicking yourself while you are down! I personally purchased stock today; the markets may go down more in the immediate future, but 3-5 years from now, I am quite confident that I will be ahead. I plan to purchase more stock this week. If you want to buy something but don't know what to buy, look relatively 'safe' securities such as index mutual funds or index ETF's. Low fee funds from companies like Vanguard are usually a good idea.

disclaimer: I personally work for S&P and have holdings in nearly every major index from S&P and MSCI as well as several smaller indexes in emerging markets. My favorite place for savings/cd's is INGDirect.

jbnwc
Mon Sep 29th, 2008, 03:55 PM
One more thing - the US market when down about 8.8% today, but historically a large jump follows shortly after a large decline. If you pull out tomorrow, you could very well miss out on a huge upswing later this week or especially when congress agrees on a cash infusion package for the US market.

jbnwc
Mon Sep 29th, 2008, 04:01 PM
BTW - even the package that failed today did not immediately give $700b to US companies in danger. It gave $250b initially and then could increase up to $700b.

We have to stop the panic in the market. These securities that at 'worthless' in the market right now are truly worth something, even if not as much as was originally thought. As long as we continue to pay our mortgages and credit cards these securities will be worth something in the future. Unfortunately right now no one is willing to buy them outside of the gov't and that leaves banks like WAMU and Wachovia with no cash to pay all the panicky people who are cashing out right now and making the problem worse.

Devaclis
Mon Sep 29th, 2008, 04:03 PM
If the gubbamint stands to make a lot of money on this, and these companies are actually worth something, why are no private sector companies jumping on this? Seems like a prime opportunity to me.

Gramps
Mon Sep 29th, 2008, 04:13 PM
This really is the mystery step, isn't it!


:lol:

rforsythe
Mon Sep 29th, 2008, 04:22 PM
If the gubbamint stands to make a lot of money on this, and these companies are actually worth something, why are no private sector companies jumping on this? Seems like a prime opportunity to me.

I'm guessing here, but I think the finances that are involved are so complex at this point, that nobody actually understands them. Private co's don't want to assume that and be wrong. Also in some cases, private companies ARE jumping on it, with Wachovia being the latest to get absorbed.

I think the government planned to stop the insanity first, and sort out the mess later.

Devaclis
Mon Sep 29th, 2008, 04:26 PM
I am in the process of reading the 110 page bill right now. It looks like what the feds are trying to do with their money is actually set a PRICE on these assets that seem to be "PRICELESS" right now. That could be reason nobody is committing to purchase them as of yet. Once there is a price set on these assets then the private sector can purchase them.

TFOGGuys
Mon Sep 29th, 2008, 04:44 PM
I am in the process of reading the 110 page bill right now. It looks like what the feds are trying to do with their money is actually set a PRICE on these assets that seem to be "PRICELESS" right now. That could be reason nobody is committing to purchase them as of yet. Once there is a price set on these assets then the private sector can purchase them.

How long before "priceless" is equal to "worthless"? Many of these companies are houses of straw, and now the Big Bad Wolf has come huffin' and puffin'.....

Snowman
Mon Sep 29th, 2008, 05:03 PM
I feel like I have partial responsibility for all of this mess because I didn't make much of an effort to educate people outside of my immediate circle of friends(who are all sitting pretty right now). It wasn't just a few CEO's who caused all of this. Much of the problem was caused by millions of average people who got into mortgages that they did not understand. Mortgages that were sold by people who didn't understand them, either. If housing prices had continue to skyrocket, these average people would all be sitting pretty right now. That isn't the only problem, but a big slice of it. Other problems were caused by new and increasingly complex securities that no one seemed to understand or know how to value.Ok, Ok that makes a bit more since. It’s like when a pro poker player has the big stack to the left of a fish with a small stack.

Because the pro knows more about the game and can take advantage of his position and chip stack, he can play the inexperienced player, over betting to steal blinds and pots while avoiding paying out winning hands.

And of course it’s the inexperienced players fault for even sitting at the table.

Just had to put it in terms we fish could understand… :)

jbnwc
Mon Sep 29th, 2008, 05:11 PM
How long before "priceless" is equal to "worthless"? Many of these companies are houses of straw, and now the Big Bad Wolf has come huffin' and puffin'.....

They are only worthless if all Americans decide not to pay their mortgage or credit cards. Wachovia has more than $800 billion in assets, but much of that they can't sell right now because of the panic. They have to sell assets for a loss just to provide cash for those of us who panic and pull cash out of our accounts.

There are several private companies who are doing what they can - Bank of America, Citigroup, JPMorgan, Wells-Fargo, and ING are some that have already done something or will probably be needed soon. Part of the problem is that the WAMU's and Wachovias that need cash infusions are far too large for little guys like Bank of the West to do anything about.

TFOGGuys
Mon Sep 29th, 2008, 05:23 PM
They are only worthless if all Americans decide not to pay their mortgage or credit cards. Wachovia has more than $800 billion in assets, but much of that they can't sell right now because of the panic. They have to sell assets for a loss just to provide cash for those of us who panic and pull cash out of our accounts.

There are several private companies who are doing what they can - Bank of America, Citigroup, JPMorgan, Wells-Fargo, and ING are some that have already done something or will probably be needed soon. Part of the problem is that the WAMU's and Wachovias that need cash infusions are far too large for little guys like Bank of the West to do anything about.

It doesn't take "all" Americans to bring down the house of cards, all it takes is a large enough percentage to "quit paying their mortgages", combined with deregulated cash reserve requirements. A large enough percentage of depositors decide they want their cash, and viola, you have Chicken Little meet Wall Street. And we, the taxpayers, are on the hook.

Yes, I am back....more often as the weather permits....:devil2:

Matrix
Mon Sep 29th, 2008, 05:24 PM
I found this artical interesting. After reading it I am starting to side with the group that is voting against the bail out. Even though I am as torn as any one on the subject.

http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html

"Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.
Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents."

jbnwc
Mon Sep 29th, 2008, 05:25 PM
Because the pro knows more about the game and can take advantage of his position and chip stack, he can play the inexperienced player, over betting to steal blinds and pots while avoiding paying out winning hands.

And of course it’s the inexperienced players fault for even sitting at the table.

Just had to put it in terms we fish could understand… :)


Even worse - the pros in the finance/mortgage world didn't (and mostly still don't) know how they work or how much the securities were truly worth. One bad one is the 'credit default swap'. The explanation on Wikipedia isn't bad. It's kind of like an insurance policy for bad credit card debt. Wachovia might buy this from a private equity firm, but then the private equity firms didn't fund them properly and weren't able to pay when the credit debt went bad. I translate this sort of stuff into english for my clients and I have a hard time understanding these things.

The CEO's didn't even know they were getting into securities that were going to bite them in the future. They were making big money on these securities and that was about all they knew about them. The 'experts' - whoever they are - were supposed to be keeping track of these things. People looked to companies like mine, S&P, to rate these new products. The products had never before defaulted and should have been good had Americans actually paid their debts, so we gave them good ratings. Now we know these assets aren't worth what we originally thought.

jbnwc
Mon Sep 29th, 2008, 05:34 PM
It doesn't take "all" Americans to bring down the house of cards, all it takes is a large enough percentage to "quit paying their mortgages", combined with deregulated cash reserve requirements. A large enough percentage of depositors decide they want their cash, and viola, you have Chicken Little meet Wall Street. And we, the taxpayers, are on the hook.


True - only something like 3 or 4% of mortgages are defaulting. That is a tiny amount compared to the Great Depression. Those few have kinda screwed everything up for the rest of us. They never should have been allowed to get mortgages in the first place; the recent politically correct view is to allow anyone and everyone to get mortgages, whether or not they can afford it.

We might be 'on the hook' now, but that will most likely pay off for us in the long run. Our finance system will stay afloat for now AND we should be able to sell the assets later for much more than we pay for them.

jbnwc
Mon Sep 29th, 2008, 05:38 PM
Please read this article if you are thinking about cashing out.

http://www.marketwatch.com/news/story/stuffing-cash-mattress-good-way/story.aspx?guid=%7B6D9277E4%2D5DF7%2D4D36%2D8E64%2 DE83AD7FB7DE7%7D

TFOGGuys
Mon Sep 29th, 2008, 05:59 PM
Please read this article if you are thinking about cashing out.

http://www.marketwatch.com/news/story/stuffing-cash-mattress-good-way/story.aspx?guid=%7B6D9277E4%2D5DF7%2D4D36%2D8E64%2 DE83AD7FB7DE7%7D

I'll not be cashing out my retirement accounts, but just the same, I'm minimizing my use of credit and building a couple of months of cash reserves. FDIC may insure our accounts with "the full faith and credit of the US Government", but that doesn't mean that they are going to pay instantly if one of our banks fails. I certainly don't want to lose my livelihood because I can't pay my business' expenses while FDIC dithers over who gets paid and when.

wulf
Mon Sep 29th, 2008, 06:36 PM
I was worried about the bill being passed right up until bush started backing it, then i knew it'd die.

My problem isn't with the bailout per say it's with the creation of 700billion dollars. It's not getting borrowed from some other budget, we're just going to print it.

I hope you can spell inflation.

mclarke
Tue Sep 30th, 2008, 08:50 AM
I'm minimizing my use of credit and building a couple of months of cash reserves.

See, I don't understand this. If you use credit cards with a pay in full mentality why wouldn't you still use them? I like earning between 2 and 5 percent free money.

jbnwc
Tue Sep 30th, 2008, 08:50 AM
My problem isn't with the bailout per say it's with the creation of 700billion dollars. It's not getting borrowed from some other budget, we're just going to print it.

I hope you can spell inflation.

I don't believe that's true. I haven't heard anything about printing money and with the Fed already concerned about inflation, the last thing they would want to do is aggrevate it. I'm guessing someone was trying to scare you.

Here is some perspective on yesterday's drop. The Dow Jones Index put up a big number, but it was far from the Dow's single day biggest % drop. Also, keep in mind that the Dow Jones is just an index, it is not 'the market' and it only represents 30, yes 30, of the largest US companies. The S&P 500 is a far better US market indicator. That is the one you really need to watch and it actually dropped about 8.8% yesterday, much more than the Dow.

Just like I said yesterday, the markets already made a big jump this morning. If you sold yesterday, you not only took a huge loss, but you missed out on today's big gain.

http://www.marketwatch.com/news/story/perspective-dows-record-point-decline/story.aspx?guid=%7B6C15A4EB%2D2595%2D4294%2D8643%2 DB052D17B3E72%7D&dist=hplatest

jbnwc
Tue Sep 30th, 2008, 08:55 AM
See, I don't understand this. If you use credit cards with a pay in full mentality why wouldn't you still use them? I like earning between 2 and 5 percent free money.

Most people aren't disciplined enough to do that. If you are in tune with your finances and know how to work the credit cards, you can really use them to your advantage. I just got a 4% unsecured loan from a credit card with no rate expiration as long as I'm making payments. I can't even get that kind of a rate from my credit union for a secured auto loan!! Heck, at the very minimum I can let it sit in an 18 month cd from ING and get 4.5% on it starting today. In 12-18 months, there is a good chance rates will be higher and I'll be able to get 5+%!

mclarke
Tue Sep 30th, 2008, 09:42 AM
It used to make sense to take advantage of the 0% Balance Transfer rates and stick them in CD's etc.. but not anymore. Earning .5% on 10,000 20,000 or 30,000 is not worth the hassle and the balance transfer fees.

But yes, it takes commitment to not use credit cards as extensions of your paychecks.

DARK ANGEL
Tue Sep 30th, 2008, 09:44 AM
May I suggest removeing all your money out of your 401Kd, taking the 15% loss and buy gold...



that is what i will be investing bimonthy. when money has no value, its the material shit that is worth something then....

puckstr
Tue Sep 30th, 2008, 09:47 AM
Most people aren't disciplined enough to do that. If you are in tune with your finances and know how to work the credit cards, you can really use them to your advantage. I just got a 4% unsecured loan from a credit card with no rate expiration as long as I'm making payments. I can't even get that kind of a rate from my credit union for a secured auto loan!! Heck, at the very minimum I can let it sit in an 18 month cd from ING and get 4.5% on it starting today. In 12-18 months, there is a good chance rates will be higher and I'll be able to get 5+%!

Be very care full with the "no rate expiration" stuff. I had a Providian CC with 5% for life. I was NEVER late and NEVER over my limit. My card was bought out??? And it was then some other Credit company (I don't remember who) and the rate jumped to 14% I bitched and screamed and they laughed at me and said "just pay it off it you do not like it." At the time I thought it was cool to have a "Platinum" card with Bookoo Limit and a huge balance. I figured at 5% interest the huge balance was no problem because I was getting a lower rate than a bank would give me. Well I was wrong.

Point is Companies fold and the debt is sold off to other companies, then the agreement you had is out the window.

I noticed Providian is WaMu....oops looks like it will be Chase and they card holders may be in for a rude awakening.

mclarke
Tue Sep 30th, 2008, 09:53 AM
Even on those fixed rate balance transfers they have the right to cancel or change your rate at anytime. You are correct puck.

puckstr
Tue Sep 30th, 2008, 10:05 AM
Even on those fixed rate balance transfers they have the right to cancel or change your rate at anytime. You are correct puck.

A painfull lesson :banghead:

ihavealegohead
Tue Sep 30th, 2008, 10:16 AM
I for one can't believe that CEO's didn't see this back in 2004, 2005 and 2006. The program "teasers" were specifically designed to get people into mortgages they could not afford. The sole reason why these instruments were invented was to keep the housing market booming. It extended growth and kept the US out of a recession. Part of the MBA program for these CEO's is ethics, something they surely missed out on. These are the people who should have been protecting the financial system from Americans swallowing themselves in lust unwilling to live within their means. That's not to say there isn't a personal responsibility in all this, but how is the main street guy to know that 3% of the mortgages are being granted to people who could not live up to the terms.

The United States housing market is clogged with subsidies and regulations.

Insurance by the FHA of mortgages to first time and low income homeowners? This is where the FHA helps you buy a house when you can't save the 20% for the down payment. Is this how your parents did it? Of course once you graduate college you have to buy a brand new Honda Civic and a great big house like mom and dad.

And then there is the quasi-governmental Fannie Mae and Fannie Mac Corporations that funded a trillion of dollars to the mortgage market. Would this have been possible without the government support? How dare anyone say that this was financial crisis was created by wall street ?

I am skeptical that government intervention is needed to resolve this crisis. If I'm the CEO at ABC bank last year (for example ) and I see a trend in default mortgages from those buyers who are being hit by high rates, is it not in my best interest to sort out those people with good credit who can make a payment if the loan were re-organized?

puckstr
Tue Sep 30th, 2008, 10:39 AM
Saying CEO and ethics in the same sentence is just wrong.

The entire concept of the "Golden Parachute" is unethical. So I do a crap job and get sacked I still get my fat exit package....SWEET.

Currently I work for a public company that the CEO and his cronies are DESTROYING the company and they just sunk a buy out bid by a real company.

We are circling the drain and when it all goes south, the CEO will get a pat on the back and a FAT fucking check. That is NOT right.

ihavealegohead
Tue Sep 30th, 2008, 10:49 AM
Saying CEO and ethics in the same sentence is just wrong.

The entire concept of the "Golden Parachute" is unethical. So I do a crap job and get sacked I still get my fat exit package....SWEET.

Currently I work for a public company that the CEO and his cronies are DESTROYING the company and they just sunk a buy out bid by a real company.

We are circling the drain and when it all goes south, the CEO will get a pat on the back and a FAT fucking check. That is NOT right.

Least we not forget the CFO, executive council, the board, and all the other blundering idiots that support the CEO.

puckstr
Tue Sep 30th, 2008, 02:16 PM
Least we not forget the CFO, executive council, the board, and all the other blundering idiots that support the CEO.


CFO is spineless and the Board doesn't seem to care about anything.

Daily I hear of the criminal improprieties that are going on and I start to fume. Well, Fuck it we can just lay off more employees.

The theme of management is "Let them eat Cake, ha ha ha, it's Tee-time!"

buddahson
Tue Sep 30th, 2008, 05:37 PM
We'll just have to wait and see what "revised" package they try to push next.

wulf
Wed Oct 1st, 2008, 08:00 AM
I don't believe that's true. I haven't heard anything about printing money and with the Fed already concerned about inflation, the last thing they would want to do is aggrevate it. I'm guessing someone was trying to scare you.


Then where was the money going to come from?

Snowman
Wed Oct 1st, 2008, 08:22 AM
I can’t see where any bail out plan will do anything more than delay the crash of this economy.

People in this country simply have too much debt. Between mortgages, credit cards, equity lines, vehicle loans etc. the total amount has to be a staggering number by now.

I do agree people were greedy given all this money to spend. We were even told spending was a way we could do our part in supporting the war. It became almost patriotic to buy those flat screens. And this spending is what has been keeping our economy going after the tech bubble burst.

However, these financial companies that want this bail out were the ones giving away all these loans and credit cards. I can’t count the number of credit card and bank loan offers I have got the mail. They took the risk of the possible foreclosures and bankruptcy’s and now expect to be covered for their loses.

How does that solve the initial problem of all this debt?

The only way I see is if we have a plan that addresses how to restructure this debt so people can pay them off. Make it easier for people to do things like change an ARM loan in to a Fixed, Freeze credit card rates etc… This is the only plan I believe the people should support.

No matter what your view express it to our senators today!
Allard, Wayne (http://allard.senate.gov/)- (R - CO)
Salazar, Ken (http://salazar.senate.gov/)- (D - CO)

InlineSIX24
Wed Oct 1st, 2008, 08:39 AM
Similar to Ralph, I'm on the fence. So far I vote to let the financial institutions fail and let free market economics take over. All the key points for why we should bail them have me disagreeing so far:

-People who should not get that mortgage because they can't afford it will be turned down... Good!

-People who want to have 3 cars in the driveway with $500+/mo payments that can't pay on them will be denied... Good

-Those who want to pay off one credit card with another and never intend to pay back their debts will not be issued credit so easily.. Poor babies

Nick_Ninja
Wed Oct 1st, 2008, 02:07 PM
And the way they voted:

http://graphics8.nytimes.com/packages/images/business/20080929-CONGRESS-VOTE-GRAPHIC/0930-web-VOTE.gif

http://www.nytimes.com/interactive/2008/09/29/business/20080929-CONGRESS-VOTE-GRAPHIC.html

jbnwc
Thu Oct 2nd, 2008, 11:42 AM
Then where was the money going to come from?


When the gov't needs money, they sell securities. That is exactly what they plan to do in this situation as well. I'm not sure who told you that they were going to print more money, but they must have failed 8th grade economics.

Shea
Thu Oct 2nd, 2008, 12:08 PM
When the gov't needs money, they sell securities. That is exactly what they plan to do in this situation as well. I'm not sure who told you that they were going to print more money, but they must have failed 8th grade economics.

Yeah, more debt that we need to service. Nothing like a nice $1.1 TRILLION deficit for the fiscal year...

"A rigid economy of the public contributions and absolute interdiction of all useless expenses will go far towards keeping the government honest and unoppressive." - Thomas Jefferson

Matrix
Thu Oct 2nd, 2008, 12:19 PM
Got forwarded this from one of my friends in OK.

"Jim Inhofe" <jim@jiminhofe.com>
10/01/2008 08:47 PM


Subject
I voted no.


What is your opinion? Click here to read this message on the JimInhofe.com blog and leave a comment.
The Senate just voted on the bailout, and I voted no.

After spending time in Oklahoma meeting with my constituents, local business leaders, and elected officials, I could not, in good conscience, vote to approve a massive taxpayer-funded rescue plan that was so hastily crafted.

Too little time was allowed for reading and comprehension of this bill. Insufficient time was allowed for proper discussion and debate on a bill with a $700 billion price tag. $700 billion dollars of your taxpayer money.

Certainly our nation faces a financial markets crisis that requires action. Unfortunately, it remains unclear if this bill is the right action. I believe it is much more important to get it right than to rush it through.

My vote tonight was against the Paulson plan, not against taking extraordinary action to provide necessary confidence to financial markets. The plan before us would have bureaucrats in Washington attempt to do what the experts on Wall Street can't do - value troubled assets.

From the very beginning, it was the Paulson plan or no plan. It is Congress's duty to examine its options, deliberate, come to a decision that has the support of America, and act. I regret we were not allowed to do that.

Sincerely,
Jim Inhofe

Nick_Ninja
Mon Oct 6th, 2008, 01:06 PM
And the jury is still out:

http://www.youtube.com/watch?v=mUdKi-pe4XI