Financial Crisis Megathread - Revised bailout passed senate/house and goes into law

Discussion in 'Off-Topic' started by Commissar Smersh, Sep 29, 2008.

  1. Commissar Smersh

    Commissar Smersh 2020 Staff Member

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  2. sims

    sims walls of text

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    if the Dow or the S&500 ever hit 0, put on your best mad max outfit, because the world as we all have come to know it has ended and its about time to start shooting people in the face for the gas in their car.

    this is simplified, but look at it like this.

    lets use the S&P 500. This is the 500 largest companies in America. a company can fall off this list and be replaced by another company.

    for 0 to hit, all publicly traded American companies are out of business.

    the points system is basically I gauge. lets say today the S&P500 is at 1000 points. lets say tomorrow it closes at 1100. it when up 100 points, or 10%. That means these companies share prices on average went up 10%, some might have been 25%, some might have been 2, but on average the share prices of the 500 largest companies in the US when up 10%. this indicates to you that as a whole the country is growing.
  3. GRP

    GRP oh snap

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    I pretty much agree with this. Ain't the end of the world.
  4. mistawiskas

    mistawiskas kik n a and takin names

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    I have a bit more faith in people than that sims. it's the corps that I have totally lost faith in. case in point:
    After bailout, AIG sent executives to the spa - U.S. business - MSNBC.com

    What would happen if a good sized portion of people with outstanding unsecured debt, just said fuckit and chose to not pay another red cent? This is not a poke-in-the-ribs question. I'm asking Sims as he is most knowledgable in this field. What would happen?
  5. MSP

    MSP Haunting a dead forum...

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    Wiskas, I very nearly shit my pants laughing... :lol:
  6. mistawiskas

    mistawiskas kik n a and takin names

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    Especially how the explicative was editted:D.
  7. smirnoff

    smirnoff Curmudgeon

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    Coordinated global rate cut this morning. Market initially rallys... then makes new lows.
  8. mistawiskas

    mistawiskas kik n a and takin names

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    People are affraid of loosing what took so long to accumulate:
    Retirees flee stocks to save shrinking nest eggs | U.S. | Reuters
    I lost all faith in the markets and "advisors" back at ther dotcom crash. Lost my retirement savings. I lost faith in putting money aside in other ways, when my income took a 65%+ plunge this year due to the in dustry I work in being the hardest hit.
    Savings reserves of three month's bills, gone! savings reserves for nest-egg.....gone!
    Now heading into the slowest time of year for my industry....not good, no cushion anywhere. I'm tired of not eating, no money for utilities and neccessities including doctors and meds. so the unsecured credit payments and tax payments are going to the back of the list. I've made up my mind, Housing, food, trans, utilities come first and fuck the credit corps. they and the guv made the mess, they can clean it up without me.
    for the record, i was not living beyond my means when my debt was incurred. The econ took such a fast and seemingly permenant plunge, as well as my health, that earning capacity plummetted out from under me. 80,000 one year and 18,000 the next. It could happen to any of us, don't be in denial.

    edit: IMHO....the faster this thing falls totally apart, the sooner we can rebuild it. Especially advantageous if the whole world 's finances fall at the same time. And I do believe with every ounce of my being, that falling totally apart is inevitable.
  9. Goofus Maximus

    Goofus Maximus Too old to be this dumb!

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    The joke is, the Fed has it's psychology wrong, and all the steps it takes to reassure the market, are actually telling the market how bad the Fed thinks this problem is. It's that "psychology of persuasion" thing again, similar to, when the Park Service put up "Please don't take the rocks" signs in the Petrified Forest National Park, rock theft went UP by 33%, because the signs told people that everyone was doing it!
  10. ThatHideousStrength

    ThatHideousStrength Junior Member

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    Anyone find it interesting that all this shit happens just in time that baby boomers are retiring. This fucks over so many people. It's sad.
  11. MSP

    MSP Haunting a dead forum...

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    Well, folks should transition to more secure investments as they get closer to retirement. But yeah, my Mom is basically fucked. She'll never retire at this rate.
  12. smirnoff

    smirnoff Curmudgeon

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    I feel for the people referred to in that article. It shows the market KNOWS their position. In my mind it's almost irrelevant what's in their portfolio. It's like playing poker with your cards face out. The strength of your hand will not matter. They simply don't have the time to allow things to recover, and so they liquidate. And the market would out wait them anyways.

    The market can stay irrational longer than you can stay solvent.
    - John Maynard Keynes

    My own parents are only a couple years away from retiring. I know they have maybe a 1/4 of their retirement funds exposed to this market and like anybody holding right now they're currently down. It's not a life and death amount, but it could dictate how much belt tightening they will have to do, how many more years they have to work, or if they will have to sell their home and move outside the city (which they might do anyways). They are working on paying off 40k of a mortgage for recent renovations. I'm probably going to step up and just give them 40k out my own savings so they can get that mortgage out of the way. As I'm not going to be putting my money in the markets for at least a couple years anyways, it seems like the right thing to do. Saves them paying interest to the dumb banks. They loaned me about 1000$ 3 yrs ago when I when I was still struggling to make ends meat as a daytrader, so they can consider it a return on investment. To me it seems better to help them be in a solid position now rather than have their pensions not stretch far enough 20 years down the road and have to step up and help them at that time (which of course I would). It's a mutually good thing, and the only thing worth investing in at this point.

    Anyways after talking it over with them I can better empathize with people who feel their hand is being forced. A tough situation, with no easy solution.

    I also feel for your situation wiskas, being very much on your own.
  13. Goofus Maximus

    Goofus Maximus Too old to be this dumb!

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  14. Jackalope

    Jackalope NNNNEEERRRRDDDSSSSS!!!!!!

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    lol I liked that. the rip on Baby Mama was pretty funny too.

    edit: oh yeah, I'm pissed. my 401K is down 30 percent so far. I invest in high risk, since I'm so young, and I know it will bounce back up, but it's still makes me rage when I see it.

    btw, I saw this coming, and chose to invest in foreign markets, but my damn 401k provider's "foreign markets" apparently mean the UK. So I'm missing out on the fat profits of China :(
  15. mistawiskas

    mistawiskas kik n a and takin names

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    Now you know a bit about why I'm so pissed. I'll die working my ass off and that is not an exageration. You talk about taking a 40,000 dollar ass beating, try loosing 50+ overnight, because I listened to advisors say that it'll get better, alot more went the next day leaving me with fourty to run away with. all my retirement gone with the dotcom bubble shit. Now this? I do not get to retire, plain and simple. I'm going to have a shitload of company too.
  16. sims

    sims walls of text

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    its already happening on a small scale, and its partially the cause of whats going on.

    I actually talked about that in one of my recent posts. let’s say we time machine back to a year or so when markets were at their peak and the US banks hadn't started be effected yet, lets even pretend they operated ethically and this sub prime mess wasn't going to have an effect down the road. Even then if the large majority simply stopped paying their bills it would cause a collapse not unlike whats happening now.

    think of it like this.(again, I'm super simply things, but this gives you the gist) banks lend to people and to businesses, banks make money off interest they make off this. Consumers work and then gve money they make and borrow to companies for goods and services. These companies use these profits to pay back there borrowing and as income to themselves.

    all the while the Gov. makes money off the taxes they take off peoples incomes, sales taxes, taxes on business incomes from the products and services they sell, etc. as well as the income that banks make. Basically they tax everything to provide themselves with income, This in a nutshell is currently the modern day world is run in an oversimplified explanation :p

    so lets say all of the general public permanently stop paying their debts. when you stop paying your bills banks are forced to start collecting on assets to try and pay their bills, because they aren’t receiving there expected income (they borrow themselves from the Gov.)(unsecured debts are simply written off and sold to collection agency’s further hurting the banks)(the value of most assets fall because no one is paying the current price for them) no one’s out spending. Companies stop making money, they can't pay their debts, as this continues they eventually go under, jobs are lost and over time eventually almost all companies would go under, only the ones the produces the bar minimums we need to live survive, and even they would have had huge job cuts, dividend cuts, cuts everywhere so they can at least survive. More people are out of jobs and no one is making any money. When less people are working and companies aren’t making money, the Gov doesn't get there revenues via taxes, they also have the added strain of more and more people using Gov programs like social assistance etc. and they can no longer pay the debts they have to other countries or there employee's nor can they continue to pay out to there various assistance programs. they print more and more money which is allready becoming increasingly worthless regardless because the rest of the world is losing confidence in your country. Inflation sky rockets, what little money people have is worth less and less. Current assets become worth less and less as no one is willing to pay previous market values for them.

    From there I can't really say. At that point your country economy is in ruin, your standard of living has become worst then most people can ever imagine right now and the Gov. is in a state of collapse. who knows what cards they play at that point.

    Well everything falls apart there would be considerably more repercussions then I’ve mentioned, but I could go on all day.
  17. GRP

    GRP oh snap

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    Well, if you want to get really technical, simply being guarantees ending.
  18. mistawiskas

    mistawiskas kik n a and takin names

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    Thanks for the info.
    So doesn't it make sense for the finacial industry, to treat people with honesty and integrity, and an attitude of fairness rather than the cutthroat tactics that have been employed? Same as the principals an employer incorporates to enable good worker attitudes and great production from employees. I don't know, it's a bad situation. The financial leaders in the USA seem to have an elitist and almighty attitude towards the people who owe them money and go at it with a strong arm tactic of using fear and threats.
    I really don't know what the sollutions are. The same brand of fear that was used to keep customers in line, is what's also making the system collapse. I made a vow to pay all my unsecured debt. I may have to go back on that vow. It has gotten to the point where there's never any food in the house, living paycheck to paycheck would be a huge step up compared to where it's at now. I am foregoing medical treatment and care to pay off credit and taxes. I've cut back in every way possible on utilities, only to have those savings eaten up by rate increases. I give up. I have to take care of myself,
    the guv isn't going to, the banks and lenders aren't going to. After rent and utilities including transportation, there's nothing left, and that picture is getting bleaker. This is all litteraly costing me my health and thanx to back-to-back corruptions and bubble bursts, there is no retirement....ever. what i'm going through, more and more people are going through. so what's the sollution?
  19. MSP

    MSP Haunting a dead forum...

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    So you never said, were you invested in individual stocks or funds?
  20. mistawiskas

    mistawiskas kik n a and takin names

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    I was invested in riskier tech sector stocks through the Principal and Schwaab as I was attempting to gain as much as possible to make up for some lost time due to twenty years of drug addictions. i gambled and lost. Much the same as the whole industry has done. This was through 401K's and I was aware of the risks, but saw no other way to meat the goals that I needed to hit in order to have any kind of life in retirement. Taxes and penalties hit really hard when the fund at Schwaab was withdrawn. The IRS really fucked me over and, to this day, I'm fucked with them due to one little (yeah right) mistake on the reporting of the rollover and withdrawl of the balance of the fund. out of 42,000, I ended up with less than 28,000 after the tax penalties. Use discression when an advisor cautions you to "ride it out". take a good hard look at exactly what it is you're "riding out". It's all a gamble, but concider this: " Las Vegas wasn't built because of the gamblers that won". so I take responsibility for screwing myself over. The financial industry needs to follow suit IMHO.
  21. sims

    sims walls of text

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    Yes! But doesn't it makes sense that human beings should all treat each other with honesty and integrity, and an attitude of fairness rather than rape, steal, murder and hate eachother?

    the answer agains Yes! so why don't we? We've been like this since the days of cave men. Whats wrong with us? find me the answer and solution to that question and you'll solve every problem in the world. I spend alot of time soul seaching on this over my life, and i've got nothing.

    its a difficult to answer this, there is no right or win win solution for everyone. Off the start I think banks for the most part(again, I can only speak in regards to the Canadian banks) are pretty fair. You ask them for Money and through an application if they believe you can and will pay them back, they will give you some under the signed legal agreement that you will do so.

    if the borrower pays them back, all is well, everyone is happy. The problem arises when they do not. What solution is there? They gave someone money, that person promised to give it back and has not, what do you do? banks make alot of money its true, but they can't just say “hey fuck it guy, were rich, don't sweat it!” Think anyone's going to pay them back at that point? the answer is sadly no. they do what they can to get back what is owed to them.

    its not a perfect system but what’s the alternative? I find it hard to blame the banks for trying to get back what was promised to be paid back to them. Like I said, if borrowers held up to their side of it, everything would end there.

    if you have a better solution that will work I bet they would love to hear it, debt collection is a huge costs to the banks and they loose a lot of money over unpaid written off debts that I know they wish they did not have to deal with.

    in most cases its not even the banks, they normally only try for 120 days or so and then sell off the debt for penny's on the dollar to collection agency and write it off. this hurts the banks and it hurts the good borrowers who pay there debts because in some way shape or form some of the losses is going to get passed down to the good people via higher fee's, rates etc. and well that's not nice or fair to the good borrowers, its not fair that banks are loosing money that was promised back to them either and they are the ones in the position of control.

    its the collection adgency's who use the strong arm and fear tactic's. They wouldn't even exists if borrowers did not break their promises in the first place.

    again, in this regards I have no answers or solutions for you, and its not without trying, believe me.

    I think that’s the first step.

    It’s not the nice, pretty, kind, fluffy bunny rabbit utopist answer we all wish existed, but it is what it is and I think the sooner people come to the relation that big brother, businesses and corporations aren’t ever going to look after you, and that you need to take charge or your own life because you’re the only one who’s going to, the better.

    Your trying to find justice and fairness in the world Mistawiska's, and well thats noble... look around you, pick up any history book, look at the direction the world is headed....

    No one is going to look after your best interest but you, though who don’t will reap the consciences.
  22. smirnoff

    smirnoff Curmudgeon

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    I've mentioned on here before, a BBC doc called The Trap. If I'm remembering right it discusses this exact question. It's a helluva piece of work.
  23. Goofus Maximus

    Goofus Maximus Too old to be this dumb!

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    They've mentioned that, if it was just the mortgages and mortgage-backed-securities, we wouldn't have quite the problem we have now.

    What really nailed the hide to the wall was those Credit Default Swaps, where people who DIDN'T EVEN HAVE SECURITIES bought "insurance", basically placing bets on the success/failure of said securities. When the securities failed, all that insurance called for payment, but, due to "Leverage" (borrowing money with no means to pay it back), there was no money to pay on them, and the whole house of cards came tumbling down.

    It's all those credit default swaps that have multiplied the problem by 10 times (number pulled out of my arse. I don't wanna figure out the actual number, but it's a lot!)
  24. mistawiskas

    mistawiskas kik n a and takin names

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    My friend from Canada.....the answer is so simple:-k.
    All we need do is "let it begin with us. Everyone is waiting for the next guy to be the one to make everything all right. I try to let it begin with me, because that is the sollution. The sollution to everything. the sollution to every problem in the world.
    Being afraid to "reap the consequences" cannot deter me from this task. If so, I'd just be another part of the problem. i really do believ, that if we live in the sollution, the problem goes away.
  25. MSP

    MSP Haunting a dead forum...

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    Just checked my account again - 43.3% down now. It's funny because my personal 401K was slated to net me $1,300,000 by age 65, now it's estimating around $800,000! It'll come back, and it only represents about 1/3 of our total investments, so I'm still not concerned. Unless our civilization completely collapses I figure I'll still retire with a few million bucks.