|
|
lurknomore
Posts:271
 |
| 09/30/2008 9:07 AM |
 Alert
|
Another likely consequence of the failure in the credit markets is that the "velocity of money" is likely to decrease as people with money hold on to it out of fear that counterparties cannot be trusted.
see: http://en.wikipedia.org/wiki/Velocity_of_money
When this decreases, sales and income tax revenues drop (You may think that is good!) because wages and profits have dropped. Cash infusions by governments can help reverse this trend, but there are limits. The economy floats or sinks on a sea of confidence. Right now, consumer, business, and government confidence is low. |
|
|
|
|
lurknomore
Posts:271
|
| 09/30/2008 9:28 AM |
Alert
|
| jakob--Another CNBC story, just heard: Auto dealers all over the country are closing because they can't finance inventory or sales. |
|
|
|
|
jpinpb
Posts:1450
|
| 09/30/2008 9:34 AM |
Alert
|
lurk - auto dealers were already suffering. Gas prices put a halt on Hummer sales and the house ATM ran out of money. Car sales have been down for a long time already. That is no reason to bail them out.
I put this wrongly on another thread, so my apologies for reposting here:
So let's all help the banks who are now stuck w/a depreciating asset. Will 700 Billion do it?
Maybe I'm really dense. Our economy is hurting, so let's give banks at least 700 billion plus interest and that will help us. If we have no money to spend, how will taking money from us give us money?
It really defies logic to me. I do not want to reward anyone who is financially reckless. Why should I help someone losing their home when they should have not bought it in the first place? Why should I help a bank who did not take any precautions to insure the loan would be paid? Oh, I know some of you will say the precaution is the house itself, BUT appraisals were overly inflated and banks did not properly verify the values. It is their burden and responsibility, not mine. It is their business. If I fail in my business, I will not go to my neighbor or expect my neighbor to bail me out. |
|
|
|
|
punstress
Posts:123
|
| 09/30/2008 9:39 AM |
Alert
|
| "Many of us feel that the national interest requires us to do something which is, in many ways, unpopular," said Rep. Barney Frank, who forgets it's his job to [i] represent[/i] us, not defy us while telling us it's for our own good, as if were are his children. |
|
|
|
|
Brian
Posts:2210
|
| 09/30/2008 9:47 AM |
Alert
|
Posted By jakob on 09/30/2008 7:43 AM
Lurknomore, do you have a link backing up that claim of lack of small business credit? So far I have heard a lot of fear-mongering from the Bush administration but haven't seen the evidence myself. (reminds me of the reason for invading Iraq). Mortgage rates are 5.91% today on the 30-year. Down from last week. Dow is up 200 points today. No $700B of taxpayer money to Wall Street.
I agree.
It's fear mongering to hoodwink the country into a bailout that it not needed.
It's always about farmers, small businesses, restaurants and J6P when they need to pass legislation. But think about it a for second. This is a Wall Street bailout. The government will buy the banks' mortgage debt at higher than fair market value to save the banks.
Is the government going to buy your house at more than market value? NO!!
The Dow is up today and things will stabilize on their own. I hope the legislators understand that and keep on rejecting the bill.
If you have time, call the legislators and call them often.
Congress Contacts
|
|
|
|
|
lurknomore
Posts:271
|
| 09/30/2008 9:48 AM |
Alert
|
Punstress--People who post on this board may be "us" but they are not "the U.S." While sentiment here and on the TARP bailout poll is overwhelmingly in favor (95% ??) of letting the economy do what it will, two recent national polls reported today by CNBC, done before the vote yesterday, show about 1/3 of Americans favor the "bailout," 1/3 oppose, and 1/3 are unsure. The country at large has more wisdom than the few who post here. The danger of listening only to those who share your views is the development of "groupthink."
The administration has done a terrible job of "selling" thism plan, with Bush and Paulson incredibly ineffective communicators. The press continually calls this a "bailout" and repeats the mantra that it will "cost" $700 billion. It is no wonder that 1/3 of people are unsure what to think.
The "winners" will be people like me who don't need credit, a job, or economic stability. Without some effective intervention, many people (and many of you who post on this site) will be damaged more than you can believe. Housing prices will fall (in any event) but you will need all-cash to buy one, and the homes on either side of yours will slowly decay in quality. |
|
|
|
|
lurknomore
Posts:271
|
| 09/30/2008 9:52 AM |
Alert
|
Brian-- Time will tell.
I hope (and believe) that our elected representatives will not let the anarchists win.
Read the U-T editorials today. That most conservative, free-market, government-hating voicre in town finally sees the light. The dislocation is real and spreading. There is no conspiracy trying to manipulate a "Wall Street bailout." |
|
|
|
|
jpinpb
Posts:1450
|
| 09/30/2008 9:59 AM |
Alert
|
Many here should be outraged at this bailout. These banks and everyone involved knew darn well what was going on and what was going to happen. I can only speak for myself. I don't have a PhD and I'm not clairvoyant, but it was obvious to me that housing prices were overinflated and there was a bubble. And it was obvious to me that bubble was going to pop.
Now if I can figure it out - and many others here could figure it out, you're trying to tell me that the financial "experts" had no idea?? I say BS. They knew darn well. I will not call it stupdity. I call it reckless neglect. And I can tell you this. They did so knowing full well the government would bail them out. And oh, gee. That's exactly what the government is trying to do. We survived other economic woes. We don't need a 700 Billion + bailout. I just get amazed at how hooked on credit this country is. It's like watching some junkie. We just keep spending money we don't have like it's growing on trees. Money for war. Money for banks. Get a grip folks. |
|
|
|
|
BigTrace
Posts:194
|
| 09/30/2008 10:01 AM |
Alert
|
| I'm still trying to figure out how buying all the debt is somehow going to make the bank "loosen up" again?? If I make a bad business deal and lost money, but say "insurance" replaced my money, I'm still not going to make that same mistake again. How does clearing the slate make banks go back to making stupid loans?? |
|
|
|
|
lurknomore
Posts:271
|
| 09/30/2008 10:01 AM |
Alert
|
| Hostility and resentment are poor for the health of individuals and of countries. Fortunately, at times of crisis the adults typically reassert control, and I think it will happen now, too. |
|
|
|
|
jpinpb
Posts:1450
|
| 09/30/2008 10:03 AM |
Alert
|
| There is no hostility. Adults should be held and accountable for their actions and be responsible. You are making my case. |
|
|
|
|
jpinpb
Posts:1450
|
|
ownhomeinSD
Posts:163
|
| 09/30/2008 10:15 AM |
Alert
|
| For those called congressmen to vote "no", it is the time to call them to vote "yes". But anyway, you don't need to do it because some of those voted "no" did want and still want the bill passed and some of them waked up by the market reaction. More voters are bale to understand further. So, the bill will be passed. |
|
|
|
|
lurknomore
Posts:271
|
| 09/30/2008 10:16 AM |
Alert
|
jp--You write, "I just get amazed at how hooked on credit this country is. It's like watching some junkie. We just keep spending money we don't have like it's growing on trees."
I have no debt at all other than a very-manageable mortgage. I assume you are in the same situation. We have been good economic citizens. You want others to be punished; I do not. |
|
|
|
|
lurknomore
Posts:271
|
| 09/30/2008 10:25 AM |
Alert
|
| To repeat something posted yesterday: The dems could pass this bill if they were willing to take the heat alone. They are wise to require repub buy-in. Filner, who voted "no," could be persuaded to change, as could several other dems--they want changes different from what the conservative repubs want. But why face the pockets of voter wrath alone? Why not make the repubs face up to their role in causing the problem? We are facing a political drama that should soon resolve itself. That's why I am letting yesterday's stock ETF purchases "ride" even with good profits so far today. I am votong with my money, and my bet is that a financial crisis workout will occur. Time will tell!! |
|
|
|
|
jpinpb
Posts:1450
|
| 09/30/2008 10:28 AM |
Alert
|
| lurk - NO. I do not want others to be punsihed. I do NOT want to be punished for the irresponsibility of others. |
|
|
|
|
BigTrace
Posts:194
|
| 09/30/2008 10:42 AM |
Alert
|
Posted By jpinpb on 09/30/2008 10:28 AM
lurk - NO. I do not want others to be punsihed. [b]I[/b] do NOT want to be punished for the irresponsibility of others.
Ditto... couldn't have said it better, but if a deal is worked out, EVERYONE will eventually be punished and we won't have fixed anything. I have written that debt is like drugs to this country and most of us just can't get enough of it. Those like lurk, JP and myself amongst many others have exercised sound financial judgement only to be punished by those who have not, yet the gov't is still looking for ways to give the "drugs" back to us by paying for them. Eventually, I feel something will get passed, but it won't be good and the gov't will spin this saying it's in our own best interest. Rediculous.. |
|
|
|
|
jpinpb
Posts:1450
|
| 09/30/2008 10:48 AM |
Alert
|
| Big- That's true. Everyone will be punished for the wrongs of others if the bill is passed. It's like if someone is sick, the medicine will be given to everyone. It's the equivalent of funding the drug habit of junkies. |
|
|
|
|
lurknomore
Posts:271
|
| 09/30/2008 10:57 AM |
Alert
|
I disagree. It is more like an epidemic. If we don't all get the vaccine, many of us will fall ill and die, even though we are not the disease carriers. I don't want YOUR kid to get measles because MY KID could be affected. (I don't want it for other reasons, too. I don't want your kid to suffer.)
Our economic fates are more-or-less interdependent. If many banks, businesses, etc. fail, it will affect all of us one way or another. I can't easily escape your "free market" even though I believe I am fairly well insulated. I have auto insurance (and would even if not required to) even though I am a safe driver (no accidents or violations imn past 30+ years). I don't want to live in a neighborhood with empty restaurants, shops, etc. I don't want more people without health care. I am willing to be taxed more (if it comes to that--not at all assured to do so!) if it means a better quality of life. |
|
|
|
|
jpinpb
Posts:1450
|
| 09/30/2008 11:09 AM |
Alert
|
lurk - if you are so financially independent to want to help banks, then I admire you stepping up to the plate. But when I hear that WaMus CEO gets 16 million in departure for his business failures, well, I'm disinclined to lend a hand to the "needy." Which will hurt us worse? Letting the weak banks fail, or giving 700++ billion which may or may not be enough and which may or may not really solve the problem. How many bailouts before we say enough? How deep in the hole do we go? This is not just any hole. It's like quicksand.
If eveyone decides to go jump off the cliff, I'm not going to join them. Maybe I'll tell some of them not to do it. But I'm not going to grab their hand while they're running and have them pull me off the cliff w/them. That is my point. People need to be accountable and responsiblie for their actions and it is not my job, your job, to correct their errors. It is not our responsibility to fix people, businesses, etc. It is not our burden or the government's burden to fix the financial problems of businesses.
If your child has the measles, it will be my responsibility to make sure if I have a kid to keep him away from your kid so my kid won't get sick. That doesn't mean I'm going to drag your kid to the doctor and force medication on him and pay for the doctor bill. |
|
|
|
|