Sooooo.....the Economic

[Bexar Fan]

.....scapegoat bill passed, and [tag] we are "it".

[ChipOC]

So stupid. We gotta see if our guys voted for it and get them out if they did.

[GigaBear]

Who voted (http://clerk.house.gov/evs/2008/roll681.xml)

Texas Congress Reps (http://www.house.gov/house/MemberWWW_by_State.shtml#tx)

[SoTex]

This is so stupid! I'm actually amazed that Ciro Rodriguez voted "no." I'm led to believe he did it just to look "good" to his constituents.

[GigaBear]

I told you guys it was going to happen, and I can't personally say that it's a bad thing.


I'll put it the way redfish put it to me the other night---when the politicians like Bush, McCain, Obama, Pelosi, etc start preaching about how deep the **** we are in is, something is probably up. None of these people know the slightest damn thing about the economy, but when they put THEIR reputations on the line on an issue, it has to mean something.


I don't think it will work, but I don't think we could've gone without it. How's that for a catch-22?

[BearChick]

Thank heaven my guy voted against it. (Of course, it's Ron Paul, so I expected him to.) Nick Lampson also voted against it. I told my dad last night that anyone who voted for this lost my vote.

When you see solvent banks buying the insolvent ones and taking over the bad mortgages, you see the free market at work solving the problem. My tax dollars shouldn't bail out people's bad decisions any more than they already do. And my tax dollars sure as shootin' should give tax breaks for toy arrow producers and Puerto Rican rum producers as part of the largest bailout bill in history.

[baylorles]

This is so stupid! I'm actually amazed that Ciro Rodriguez voted "no." I'm led to believe he did it just to look "good" to his constituents.And that makes him different then any of the others, how?

[BaylorGuy314]

And yet, the stock market is in complete chaos today (not surprising given how the European and Asian markets opened) and credit will continue to tighten.

What a waste of a trillion bucks. Hell, that's nearly twice what the Iraqi War has cost.

[Bexar Fan]

The Declaration of Independence is two pages long. The Constitution is about a dozen pages. The bailout bill is 451 pages.

If you can’t dazzle them with brilliance you baffle them with BS.

[GigaBear]

The Declaration of Independence is two pages long. The Constitution is about a dozen pages. The bailout bill is 451 pages.

If you can’t dazzle them with brilliance you baffle them with BS.


I always tell my reps....


If you can't impress them with your intellect, you baffle them with your BS.


Close enough!

[cowboycwr]

The Declaration of Independence is two pages long. The Constitution is about a dozen pages. The bailout bill is 451 pages.

If you can’t dazzle them with brilliance you baffle them with BS.

excactly every time I read or watch something about the bailout I find out some new part of it that either doesn't make sense, seems like a handout to companies, unneeded, or just over the top in some other way. Some of it seems ok but mostly it seems like a bunch of BS they are trying to sell off as needed to prevent the end of the world.

[nein51]

If the "average" person were CLOSE to the intellectual level of the people on this board the entire country would be FAR better off, but they arent.

Market below 10k today, which really sucks.

[Bexar Fan]

Buy, buy buy.....

[Volunteer]

Market closed down over 300 points. Very crappy day indeed. I'm afraid it's going to get worse before it gets better.

[DONNIE D]

Market closed down over 300 points. Very crappy day indeed. I'm afraid it's going to get worse before it gets better.Since I'm broke already, do you think I'll get any back my month end?

[Volunteer]

Since I'm broke already, do you think I'll get any back my month end?

Donnie, I wish I knew. The market just isn't acting like it has acted in the past. IMO we have yet to reach the bottom. At least for me I'm going to hang on. If you sell now you lock in your losses. I do believe it will go up. It might take a few years, however, to get back to where it was last fall. But then if I knew anything I would be rich, own an island and hang out with Bill Gates.......

[SoTex]

Wow! Great job by our esteemed government! See what happens when you mess with a free enterprise?!?! It bites you in the butt.

Do people realize that the majority of the votes were cast by democrats?

[nein51]

ACK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

-5XX points today, down to 9400...my ex's attorney is going to love this, her half of my 401k is getting smaller every day.

[SoTex]

Thank goodness I have time to make this up. I don't want to see my statement again.

[Volunteer]

Now maybe the time to buy. It may not quite be at the bottom, but I think it might be really really close.

There's lots of money sitting on the sidelines right now.

[GigaBear]

Now maybe the time to buy. It may not quite be at the bottom, but I think it might be really really close.

There's lots of money sitting on the sidelines right now.



Agree.

[Texas Golfer]

After getting their bailout money, AIG took their staff for a weekend junket to the tune of $300,000.00 including money for spas, haircuts, massages, rooms, food, and cocktails.

I have more respect for used car salesmen than I do for politicians.

[GigaBear]

After getting their bailout money, AIG took their staff for a weekend junket to the tune of $300,000.00 including money for spas, haircuts, massages, rooms, food, and cocktails.

I have more respect for used car salesmen than I do for politicians.


As usual, you need to get your facts straight.


It was over $400,000, and they got pedicures too.


;)

[The Banterer]

As usual, you need to get your facts straight.


It was over $400,000, and they got pedicures too.


;)

Dude, you ever had an ingrown toenail? Worth every penny.

[GigaBear]

Dude, you ever had an ingrown toenail? Worth every penny.



You are the THIRD male to tell me that, and each of them acted like it was akin to sex. I've had an ingrown toenail before, but it was taken care of. I guess if I have another, I need to turn in my man-card for an hour and go get one.

[DONNIE D]

$440,000.00 to be exact.

[atxtraveler]

How quickly can those AIG executives be thrown in jail?

[GigaBear]

How quickly can those AIG executives be thrown in jail?



If Capitol Hill has their way, it will be done 10 minutes ago.



If I had my way, they'd have a bullet in their head minutes after this BS was discovered.

[DONNIE D]

The two AIG Execs sitting on the hotseat.

One seemed sorry, the other one could not give a **** either way. The panel asked him if he would give back his Bonus, and his answer was "NO WAY".

[KellerBear]

Bang bang!

[KellerBear]

I also found it ridiculously awesome that the CEO of Lehman Brothers was knocked out cold by a punch to the face while running on a treadmill at his gym....

[KellerBear]

http://consumerist.com/5060063/lehman-brothers-ceo-got-punched-in-the-face

[GigaBear]

I'm probably in the minority here, but I personally think the Lehman CEO is catching a ton of unfair flack. He was the leader of one of the most successful investment banks in the world for the 7-years in question when he was being raked over the coals for his compensation, and both his employees and thousands around the world made a ridiculous amount of money because of the work of his firm. When it went under, while he still has a ****-ton of money at the end of the day, he also lost the money out of everyone involved.

The AIG guys are totally different. Their company was not only already in danger of going under, they were ALREADY IN HOCK, yet they still go spend nearly a half a million dollars at a hotel and spa. Total BS, and that's outright criminal.

If a company has to be bailed out by the bailout, then I suggest that all executives be fired and replaced, and there be a cap on executive compensation at that point.

[KellerBear]

I think the AIG guys should go work out at that gym too...do I feel bad about the Dick Fuld...no...I also wish the CEO of Countrywide would stop by that gym.

[nein51]

CEO of Countrywide started that company from the ground up, no one (and I mean NO ONE) associated with them lost as much as he did. Sometimes people need to do more work investigating the backgrounds before speaking (not directed at you Keller).

[KellerBear]

still would be punchie punchie for him...don't care if he started it from the ground up...that company acted despicably in the past few years.

[nein51]

still would be punchie punchie for him...don't care if he started it from the ground up...that company acted despicably in the past few years.
You mean they followed the federally approved guidelines consistent with their mission statement? They loaned money.

The only real positive here will be more positive checks on banks.

[KellerBear]

http://consumerist.com/5019626/illinois-and-california-are-suing-countrywide-for-deceptive-lending-and-fraud

http://consumerist.com/366180/fbi-said-to-be-investigating-countrywide

http://consumerist.com/5010198/countrywide-ceo-accidentally-emails-homeowner-calls-his-plea-for-help-disgusting

http://consumerist.com/5020813/ex-countrywide-manager-exposes-its-lies

http://consumerist.com/5016277/countrywide-ceo-gave-below-market-rate-loans-to-senators-from-a-special-vip-desk

http://consumerist.com/consumer/subprime-meltdown/inside-the-countrywide-subprime-lending-frenzy-293902.php

No...I mean they lied and cheated...I could probably find more of these stories, but I figured you can click on anyone of them.

Also, Nein, do you have some ties to Countrywide that make you bias towards that company?

[nein51]

I have no ties to them. I am a firm believer that the housing issue falls on the shoulders of the buyers/borrowers, not the lenders. If you are too GD stupid to read your loan documents then I have very little sympathy for you.

[DONNIE D]

I have no ties to them. I am a firm believer that the housing issue falls on the shoulders of the buyers/borrowers, not the lenders. If you are too GD stupid to read your loan documents then I have very little sympathy for you.What do you think about a Mortgage Co. going around to builders and paying for turned down applications? They say, "we'll give you $50 for every app you have in your desk that has been turned down by other lenders".

[atxtraveler]

What do you think about a Mortgage Co. going around to builders and paying for turned down applications? They say, "we'll give you $50 for every app you have in your desk that has been turned down by other lenders".

Creative!

[KellerBear]

I believe it is a 50/50 affair...I think people should ONLY buy houses they can afford,and some people do not get that concept. On the other hand, I believe when companies use predatory lending to convince these unintelligent and uneducated people to take out these loans, than they should be at-fault too, since they are preying on the consumer's ineptitude for loans that they knew would not survive.

[ChipOC]

A recession is unavoidable at this point. I believe that we just wasted a bunch of money giving it to fat bankers who should have lost their shirts.

If you can't afford the house on a fixed rate, don't buy it.

[nein51]

Creative!
Indeed, brilliant.
I believe it is a 50/50 affair...I think people should ONLY buy houses they can afford,and some people do not get that concept. On the other hand, I believe when companies use predatory lending to convince these unintelligent and uneducated people to take out these loans, than they should be at-fault too, since they are preying on the consumer's ineptitude for loans that they knew would not survive.
"Predatory lending" is this decades catchword. When you go to closing you need someone to represent you in most cases. If you are unable to read the papers then get someone to do it for you. No way this is a 50/50 proposition. Caveat Emptor.

Let me try this one more time, if you make 70k a year, you cannot afford a house that costs $600,000...no matter how much someone tries to tell you that you can. You cant really even afford a $300,000 house. Even simpler, if your note is only paying interest...you cant afford a house.

We arent talking about crazy financing. We are talking about ARMs, balloon payments, interest only notes, etc. They work and they work very well for smart buyers. The rest of them, oh well, not my fault you cant (or choose not to) read.

[Volunteer]

I'm probably in the minority here, but I personally think the Lehman CEO is catching a ton of unfair flack. He was the leader of one of the most successful investment banks in the world for the 7-years in question when he was being raked over the coals for his compensation, and both his employees and thousands around the world made a ridiculous amount of money because of the work of his firm. When it went under, while he still has a ****-ton of money at the end of the day, he also lost the money out of everyone involved.

The AIG guys are totally different. Their company was not only already in danger of going under, they were ALREADY IN HOCK, yet they still go spend nearly a half a million dollars at a hotel and spa. Total BS, and that's outright criminal.

If a company has to be bailed out by the bailout, then I suggest that all executives be fired and replaced, and there be a cap on executive compensation at that point.

Agreed. If you are the CEO and you make tons of money for the shareholders, you deserve to be compensated. On the other hand, if the company is sucking air and losing it's shirt you do not deserve to make tons of cash. Compensation for CEO's, and for that matter all senior executives, should be tied exclusively to company performance. When the company does well so do the executives.

I believe it is a 50/50 affair...I think people should ONLY buy houses they can afford,and some people do not get that concept. On the other hand, I believe when companies use predatory lending to convince these unintelligent and uneducated people to take out these loans, than they should be at-fault too, since they are preying on the consumer's ineptitude for loans that they knew would not survive.

Personally I don't believe it's a 50/50 deal. I also don't believe in the concept of predatory lending. It isn't the fine print of the loan that gets people - it's the paying back part. I think everyone understands that the notes must be paid back. It doesn't take a genius to figure out that you can't handle a $1,000 per month when you earn $1,100 per month.

[Texas Golfer]

$440,000.00 to be exact.

Another AIG party was scheduled for the Ritz Carlton at Half Moon Bay but was cancelled about 15 minutes ago after media scrutiny. They released a statement saying, "We are re-evaluating spending across the board."

Can you believe the gall of AIG?

But I'm angry with the Fed, as well. After lending AIG $85,000,000,000.00 with the bailout money, the Fed is considering lending them another $75,000,000,000.00 on top of that even knowing of the $440,000.00 junket and another one scheduled!

[KellerBear]

Nein, I understand that there are a TON of people that should have known better and I stated that...I said it was the stupid people that bought into these things, but the banks knew these people were stupid and balanced the economy on these bad loans. So, stop saying you are "gonna try one more time" to explain it...that's condescending, especially since I know the friggin' details, but just believe that the banks should bear some of the burden since they KNEW what they were doing. Yes, people should know better, but we should not have sold to them so massively and propped so much up on these bad loans.

[GigaBear]

Another AIG party was scheduled for the Ritz Carlton at Half Moon Bay but was cancelled about 15 minutes ago after media scrutiny. They released a statement saying, "We are re-evaluating spending across the board."

Can you believe the gall of AIG?

But I'm angry with the Fed, as well. After lending AIG $85,000,000,000.00 with the bailout money, the Fed is considering lending them another $75,000,000,000.00 on top of that even knowing of the $440,000.00 junket and another one scheduled!



I think it's absurd that they are spending $440K on spa trips, but you do realize the key word in all of this, right?

" After lending AIG


The government is going to make SO MUCH MONEY off of this deal that it's not even funny. They don't care how they are spending their money because they are going to get it back plus 10%.


That's the part the media isn't reporting---just how much money the government will end up making on this deal. Hell, do this 4 or 5 times and there will be no need to balance the budget---it'll be the big companies and corporations bailing out the government.

[DONNIE D]

Creative!

Indeed, brilliant.

"Predatory lending" is this decades catchword. When you go to closing you need someone to represent you in most cases. If you are unable to read the papers then get someone to do it for you. No way this is a 50/50 proposition. Caveat Emptor.

Let me try this one more time, if you make 70k a year, you cannot afford a house that costs $600,000...no matter how much someone tries to tell you that you can. You cant really even afford a $300,000 house. Even simpler, if your note is only paying interest...you cant afford a house.

We arent talking about crazy financing. We are talking about ARMs, balloon payments, interest only notes, etc. They work and they work very well for smart buyers. The rest of them, oh well, not my fault you cant (or choose not to) read.

Countrywide has been doing that for years. I've kicked them out of my office.

You call it what you want, but it's nothing but "creative financing". Countrywide sold off those bad loans. I don't know how some people sleep at night.


If a Tire guy goes into Firestone and says, "I'll buy those outdated tires from you at a discount", do you ask him why? Nope, you just sell em. That to me is just as bad. Where I grew up, it was called a conscience.

[GigaBear]

Nein, I understand that there are a TON of people that should have known better and I stated that...I said it was the stupid people that bought into these things, but the banks knew these people were stupid and balanced the economy on these bad loans. So, stop saying you are "gonna try one more time" to explain it...that's condescending, especially since I know the friggin' details, but just believe that the banks should bear some of the burden since they KNEW what they were doing. Yes, people should know better, but we should not have sold to them so massively and propped so much up on these bad loans.



At this point, you're discussing tertiary details of the whole thing. Nobody gives a crap anymore about the idiots whose homes are in foreclosure, and really nobody gives a crap about the failed sub-prime lenders. What matters are the thousands of big-money investors around the world who are losing their shirts in this, causing investment banks and our economy to disappear.


If it were that simple, I say let all the bad lenders go out of business and let all the idiots who bought homes that couldn't afford it be out on the streets. But it's not that simple. This is a problem that is going to affect the entire world, and if SOMETHING isn't done (i.e. the bailout), our entire economy would collapse.

[KellerBear]

At this point, you're discussing tertiary details of the whole thing. Nobody gives a crap anymore about the idiots whose homes are in foreclosure, and really nobody gives a crap about the failed sub-prime lenders. What matters are the thousands of big-money investors around the world who are losing their shirts in this, causing investment banks and our economy to disappear.


If it were that simple, I say let all the bad lenders go out of business and let all the idiots who bought homes that couldn't afford it be out on the streets. But it's not that simple. This is a problem that is going to affect the entire world, and if SOMETHING isn't done (i.e. the bailout), our entire economy would collapse.

I understand where we are at this point and I also believe the bad lenders should go out of business...and that the people that bought out of their league should lose their homes.

[DONNIE D]

At this point, you're discussing tertiary details of the whole thing. Nobody gives a crap anymore about the idiots whose homes are in foreclosure, and really nobody gives a crap about the failed sub-prime lenders. What matters are the thousands of big-money investors around the world who are losing their shirts in this, causing investment banks and our economy to disappear.


If it were that simple, I say let all the bad lenders go out of business and let all the idiots who bought homes that couldn't afford it be out on the streets. But it's not that simple. This is a problem that is going to affect the entire world, and if SOMETHING isn't done (i.e. the bailout), our entire economy would collapse.

I know you're kidding , right?

[GigaBear]

I know you're kidding , right?



I knew that I wouldn't be popular when I posted that, but no, I'm not kidding. I'd be happy to explain why I think that way if you'd like.

[KellerBear]

Maybe the people who bought twice the house they can afford should just do this...

http://www.telegraph.co.uk/news/newstopics/howaboutthat/3159189/Married-Cambodian-couple-saw-home-in-half-after-separation.html

[ChipOC]

I knew that I wouldn't be popular when I posted that, but no, I'm not kidding. I'd be happy to explain why I think that way if you'd like.
Please do.

[DONNIE D]

I knew that I wouldn't be popular when I posted that, but no, I'm not kidding. I'd be happy to explain why I think that way if you'd like.Go ahead. I'm listening. But before you start typing, think about me, Vol, TG, and several others you know losing $20, 30 grand every time we look up now. None of us are "big time investors", just guys thats worked all our lives and saved so we could sit on the porch and smile.

[Texas Golfer]

I think it's absurd that they are spending $440K on spa trips, but you do realize the key word in all of this, right?

" After lending AIG


The government is going to make SO MUCH MONEY off of this deal that it's not even funny. They don't care how they are spending their money because they are going to get it back plus 10%.


That's the part the media isn't reporting---just how much money the government will end up making on this deal. Hell, do this 4 or 5 times and there will be no need to balance the budget---it'll be the big companies and corporations bailing out the government.

Actually, the interest rate for AIG is 12% but, if they continue to spend on frivolous activities such as these, they'll probably go under and won't repay the $160,000,000,000.00 for the base loan nevertheless the interest.

[DONNIE D]

THIS IS A NONPARTISAN JOKE THAT CAN BE ENJOYED BY BOTH PARTIES!
NOT ONLY THAT-- it is POLITICALLY CORRECT!!

While walking down the street one day a US senator is tragically hit by
a truck and dies.

His soul arrives in heaven and is met by St. Peter at the entrance.

"Welcome to heaven," says St. Peter. "Before you settle in, it seems
there is a problem. We seldom see a high official around these parts,
you see, so we're not sure what to do with you."

"No problem, just let me in," says the man.

"Well, I'd like to, but I have orders from higher up. What we'll do
is have you spend one day in hell and one in heaven. Then you
can choose where to spend eternity."

"Really, I've made up my mind. I want to be in n heaven," says the
senator.

"I'm sorry, but we have our rules."

And with that, St. Peter escorts him to the elevator and he goes
down, down, down to hell. The doors open and he finds himself
in the middle of a green golf course. In the distance is a clubhouse
and standing in front of it are all his friends and other politicians
who had worked with him.

Everyone is very happy and in evening dress. They run to greet him,
shake his hand, and reminisce about the good times they had while
getting rich at the expense of the people.

They play a friendly game of golf and then dine on lobster, caviar
and champagne.

Also present is the devil, who really is a very friendly guy who
has a good time dancing and telling jokes. They are having such a
good time that before he realizes it, it is time to go.

Everyone gives him a hearty farewell and waves while the elevator
rises...

The elevator goes up, up, up and the door reopens on heaven where St.
Peter
is waiting for him.

"Now it's time to visit heaven."

So, 24 hours pass with the senator joining a group of contented souls
moving from cloud to cloud, playing the harp and singing. They have a
good time and, before he realizes it, the 24 hours have gone by and St.
Peter returns.

"Well, then, you've spent a day in hell and another in heaven. Now
choose your eternity."

The senator reflects for a minute, then he answers: "Well, I would
never have said it before, I mean heaven has been delightful, but
I think I would be better off in hell."

So St. Peter escorts him to the elevator and he goes down, down,
down to hell.

Now the doors of the elevator open and he's in the middle of a
barren land covered with waste and garbage.

He sees all his friends, dressed in rags, picking up the trash and
putting it in black bags as more trash falls from above.

The devil comes over to him and puts his arm around his shoulder.
"I don't understand," stammers the senator. "Yesterday I was here
and there was a golf course and clubhouse, and we ate lobster and
caviar, drank champagne, and danced and had a great time. Now
there's just a wasteland full of garbage and my friends look miserable.
What happened?"

The devil looks at him, smiles and says, "Yesterday we were campaigning.. .



Today you voted."

[GigaBear]

Please do.


Sigh.


This might turn into a long post. We'll see.


The bottom line here is credit. We keep hearing that, and for me and you, all that really means is "consumer credit"--credit cards, home loans, auto loans, etc. In the business sense, however, that's not what credit means.

Let's take an example. Example number 1 is a large construction company. They employ, say, 500 employees. Overall, this is a well-run and profitable company. Obviously, to make money, this company has to have clients and jobs somewhere. For 9 months out of the year, everything is fine and dandy---they have their jobs, they are making their money and everything is peachy. The other 3 months, however, jobs are scarce, but these guys still have a family to feed and they expect their paycheck even in "slow" times. So, how else does this company make payroll during the "slow" times? Credit. Large lines of credit that banks extend to them so they can make payroll for the 3 months of the year that they don't have an influx of jobs.


This, an otherwise profitable business, relies on credit simply to make payroll during a few months of the year. What happens without that credit? Layoffs. Bankruptcy. Higher unemployment.


Granted, I'm not talking about crappy companies who should be gone in the first place, I'm talking about profitable companies who rely on this to stay in business. It doesn't have to be a LOC to make payroll, it can be an LOC just for capital---look at car dealerships. How else do they get inventory except with credit? What happens to a car dealership with no cars? Bankruptcy. You get the idea.


The point of all of that was to illustrate that we aren't just dealing with consumer credit here, and we're not just dealing with "crappy companies who can't make payroll taking out a loan." Credit is VITAL to people keeping their jobs, it's VITAL to a company's ability to produce product, it's VITAL to our economy running properly. Without out, things start happening that you can't even imagine. And I haven't even scratched the surface of the extent of things.


So, the entire point of the bailout was to loosen the credit markets. To get money flowing again, so that these companies can get the credit they need just to sustain life. I'm no expert here and I can't pretend to know the ins and outs of the credit markets, but by all accounts, it's an absolute disaster.

This isn't something that we can wait 6 months for it to happen on its own. This isn't something that will take care of itself in time. Could you go 6 months without getting paid and be "OK?" Could your company go 6 months without conducting ANY BUSINESS and still come out above water?


EVERYBODY is affected when credit disappears. If your company doesn't need the credit for payroll or for expansion capital, I bet someone they work with does. Who buys your company's product? Who SUPPLIES your company with product?


The idea behind the bailout is sickening to me. The fact that the government is having to step into the free market is not something I thought I ever would've supported, but the reality is that there is no way around it if we want our economy to remain intact.

[ChipOC]

Who voted (http://clerk.house.gov/evs/2008/roll681.xml)

Texas Congress Reps (http://www.house.gov/house/MemberWWW_by_State.shtml#tx)
Here's how the senate voted.

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=110&session=2&vote=00213

[GigaBear]

Go ahead. I'm listening. But before you start typing, think about me, Vol, TG, and several others you know losing $20, 30 grand every time we look up now. None of us are "big time investors", just guys thats worked all our lives and saved so we could sit on the porch and smile.



Kinda like my parents. They're in their 50's and at my best guesstimate, they've lost 6 figures and gaining the past week.


That's the point though, Donnie. It's only going to get worse if something isn't done. If you're watching money go down the drain now, you don't want to know what will happen in 3 months.

[DONNIE D]

Kinda like my parents. They're in their 50's and at my best guesstimate, they've lost 6 figures and gaining the past week.


That's the point though, Donnie. It's only going to get worse if something isn't done. If you're watching money go down the drain now, you don't want to know what will happen in 3 months.

Oh, I know what you are saying.

Now, to your point above.
I understand how business works, and your construction guy isn't it. Manufacturing is what you speak of. They borrow for inventory. Now, they also pay back every week. They get audited every 90 days by their bank. Sure, this hurts those guys, but not for the reason you speak of, IMO. They are hurt because the very people that buy their product can't buy right now. The reason they can't buy is because of all the CROOKS in the banking business. These guys are like leaches. Once they figure something out, they ride it like a dead horse. This has been going on for several years, it didn't just happen last week.
Atex & Nein can brag all they want about ARM's, but the fact of the matter is ARM's were never invented to help homeowners. Intrest only loans were there to help business, not retail business. One of those Crooks woke up one day, and said, Lets do this for Joe Blow. Once it started, it was like a Locomotive.
I'll say what I always do. "Keeping up with the Jones"

[nein51]

Keller, I wasnt trying to explain it to you, just state my position. Sorry if I offended, it was not my intention.

When it comes to this kind of discussion I will almost always fall on the side of the "big guy" especially when it is really an issue of consumers spending well beyond their means.

I am out in Cali this week and was joking with someone that I could fix the Cali housing market in a few years...stop building megahomes. You would have to try (and I mean REALLY SEARCH) to find a new build here that is under 3,000 sq ft. A $400,000, 3500 sq ft home is not a starter home.

[nein51]

Atex & Nein can brag all they want about ARM's, but the fact of the matter is ARM's were never invented to help homeowners. Intrest only loans were there to help business, not retail business. One of those Crooks woke up one day, and said, Lets do this for Joe Blow. Once it started, it was like a Locomotive.
I'll say what I always do. "Keeping up with the Jones"
I dont think Atex or I EVER said that ARMs were for the benefit of the homeowner (though most certainly can be).

It should be pointed out that not a single homeowner was forced into buying their house. No one put the pen in their hand and made them sign. It is the fault of no one on this board, nor the salesperson, nor the builder...it is entirely the fault of the person who signed.

You cannot convince me that a person doesnt know how much money they made. If your payment is greater than that amount, you cant afford it. You dont have to be a rocket scientist to get that.

[DONNIE D]

Gigga, here's a good one for you.

Have you ever heard of "Stated Income" ?

It's a product that was made for the self-employed. A guy who's income changes everyday. He doesn't have to prove it, just state it.

All that is great, till a Banker takes an application that is bad to start with, and turns it into a "stated income loan". It goes thru, and the guy doesn't even have a job. Funny huh? But it was happening everyday. It all goes back to who can make the most money. Commission Sales is Greed wrapped up like a Christmas present. Once you open it, you want more.

[DONNIE D]

I dont think Atex or I EVER said that ARMs were for the benefit of the homeowner (though most certainly can be).

It should be pointed out that not a single homeowner was forced into buying their house. No one put the pen in their hand and made them sign. It is the fault of no one on this board, nor the salesperson, nor the builder...it is entirely the fault of the person who signed.

You cannot convince me that a person doesnt know how much money they made. If your payment is greater than that amount, you cant afford it. You dont have to be a rocket scientist to get that.

What's your feeling on the bank just turning them away at the door? I know there are people it helps, my point is the banker putting a loan in front of someone THEY KNOW will not pay it back. If you think this doesn't happen, you need to take a nap.

[nein51]

What's your feeling on the bank just turning them away at the door? I know there are people it helps, my point is the banker putting a loan in front of someone THEY KNOW will not pay it back. If you think this doesn't happen, you need to take a nap.
Donnie, I could offer you a theoretical 1m dollar loan right now. It is up to YOU to not take it. It is not my problem if you cant.

Stated income is a great example...who told the self-employed guy to LIE about his income?? Even if the banker said, "overstate it"...well, the customer still did it, he didnt have to.

As to the bank turning them away, I have no problem with that. If I went to borrow 10m tomorrow the bank should decline that loan. If they didnt, I wouldnt take it, BECAUSE I CANT PAY IT BACK.

[DONNIE D]

Donnie, I could offer you a theoretical 1m dollar loan right now. It is up to YOU to not take it. It is not my problem if you cant.

Stated income is a great example...who told the self-employed guy to LIE about his income?? Even if the banker said, "overstate it"...well, the customer still did it, he didnt have to.

As to the bank turning them away, I have no problem with that. If I went to borrow 10m tomorrow the bank should decline that loan. If they didnt, I wouldnt take it, BECAUSE I CANT PAY IT BACK.

But, if I can't pay you back, and I take it anyway, by your thoughts, it's ok cause the Goverment will bail you out for it. Right?

And you think it takes the burden off the banker cause the guy overstated? How many Countrywide guys are doing Federal Time right now because of that? Not the Homeowner, the banker.

[GigaBear]

Oh, I know what you are saying.

Now, to your point above.
I understand how business works, and your construction guy isn't it. Manufacturing is what you speak of. They borrow for inventory. Now, they also pay back every week. They get audited every 90 days by their bank. Sure, this hurts those guys, but not for the reason you speak of, IMO. They are hurt because the very people that buy their product can't buy right now. The reason they can't buy is because of all the CROOKS in the banking business. These guys are like leaches. Once they figure something out, they ride it like a dead horse. This has been going on for several years, it didn't just happen last week.
Atex & Nein can brag all they want about ARM's, but the fact of the matter is ARM's were never invented to help homeowners. Intrest only loans were there to help business, not retail business. One of those Crooks woke up one day, and said, Lets do this for Joe Blow. Once it started, it was like a Locomotive.
I'll say what I always do. "Keeping up with the Jones"


We'll just have to agree to disagree, Donnie. Like I said, it's not just construction businesses and it's not just manufacturing---it's an unlimited number of business types, and again, that's only scratching the surface.

[DONNIE D]

We'll just have to agree to disagree, Donnie. Like I said, it's not just construction businesses and it's not just manufacturing---it's an unlimited number of business types, and again, that's only scratching the surface. No problem.

[nein51]

But, if I can't pay you back, and I take it anyway, by your thoughts, it's ok cause the Goverment will bail you out for it. Right?
Now here is where we agree. I dont like the notion of a government bailout at all. I think we might have had little option right now but I agree that the government shouldnt step in because the bank made a terrible decision.

And you think it takes the burden off the banker cause the guy overstated? How many Countrywide guys are doing Federal Time right now because of that? Not the Homeowner, the banker.
Not sure I understand where you are going. Im saying that if I offer you money and you cant pay it back, my conscious is clear. I might be out the money but I could sleep just fine at night.

[DONNIE D]

Not sure I understand where you are going. Im saying that if I offer you money and you cant pay it back, my conscious is clear. I might be out the money but I could sleep just fine at night.

The Federal Goverment said it was ILLEGAL to offer or package loans to a customer knowing that the information on the app was false. They told these guys they could try and blame it on anyone they wanted, but the burden was on them. Not the Salesman, nor the builder, but on the Loan Officer.
Nein, all I'm saying is, the crooks are there. Countrywide was one of the worse. Nobody in the Housing Business I know, think a Loan Officer should be on Commission, period. It makes it to easy to end up like we are. Some of them are living on Islands now. It's just not right. Not saying they shouldn't make the kind of money they made, just not tie it to the number of loans they write. There is a time and place for commission salespeople, but you can't be a salesman and a loan officer too. That's why it's hard to read a business card anymore. To many titles.

[ChipOC]

Isn't it also the case that these people buying the homes could afford it at the time because the interest rate was variable and down low enough for them to make the payments? Once the interest rate went up, they could no longer afford it.

It seems what Donnie said last is true. The loan officers were playing with the numbers to get people qualified without checking income and not considering what the adjusted cost would be with inflation.

[KellerBear]

Now here is where we agree. I dont like the notion of a government bailout at all. I think we might have had little option right now but I agree that the government shouldnt step in because the bank made a terrible decision.

So, you AGREE that the bank made a terrible decision?

[Bexar Fan]

The government is going to make SO MUCH MONEY off of this deal that it's not even funny. They don't care how they are spending their money because they are going to get it back plus 10%.
IF the government get's paid back.

The bailout is a sellout by the 95% of our politicians who are owned by big business. McCain-Feingold sure got the money out of politics, didn't it? Both parties are guilty as hell.

Government can't mandate integrity. The crooks should have to pay. Instead many of them are being rewarded at our expense, politicians included. :cursing: :cursing:

[ChipOC]

Now McCain is throwing out there that the government should step in and buy the underwater mortgages and readjust them to the current value.

[DONNIE D]

Now McCain is throwing out there that the government should step in and buy the underwater mortgages and readjust them to the current value.

And, watch who buys them. Stay tuned!!! Some of you will love this.

[DONNIE D]

IF the government get's paid back.

The bailout is a sellout by the 95% of our politicians who are owned by big business. McCain-Feingold sure got the money out of politics, didn't it? Both parties are guilty as hell.

Government can't mandate integrity. The crooks should have to pay. Instead many of them are being rewarded at our expense, politicians included. :cursing: :cursing:

Thank you.

[DONNIE D]

Give y'all a little something to think about. "Closing Cost"

Now, this will mean something different to different age groups.

Some of us remember when $1500.00 was the norm.
Now I've seen CC avg $5 grand. And the sad part is it's not even Closing Cost. It's Pay Offs, and the buyer pays for it for 30 years. Brokers, Buying down Rates, Lawyers, Surveyors, Doc. Fees, Points, Origination Fees (thats always a good one), Mortgage Insurance(another good one). Then you throw in the Down Payment they didn't make, and all of the sudden, the loan they didn't qualify for, is now more, and they can have it tomorrow.

It's a funny world.

[DONNIE D]

Oh, I forgot.

Keep it 3-5 years, AND FLIP IT!!!!

[Bexar Fan]

Just in case you thought that the Treasury department will run this:

http://www.govexec.com/story_page.cfm?articleid=41145&dcn=todaysnews

Treasury begins building financial rescue operationBy Martin Crutsinger and Jeannine Aversa, Associated Press October 6, 2008
WASHINGTON (AP) -- The Treasury Department moved swiftly Monday to implement the financial rescue package, naming a former Goldman Sachs executive to oversee spending the $700 billion earmarked for the plan and pledging to work with other countries to calm global financial markets.
The administration announced it had tapped Neel Kashkari, 35 - an assistant Treasury secretary for international affairs - to head the Treasury's new Office of Financial Stability on an interim basis.
Kashkari helped draft the legislation as one of Paulson's close advisers on the crisis. Kashkari joined the government after working at Goldman Sachs, the firm Paulson headed before joining the Bush administration in 2006.
The President's Working Group on Financial Markets, which includes Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, said it would move "with substantial force on a number of fronts" to implement the expanded authorities granted to the government when Congress passed the emergency rescue package last Friday.
President Bush's top economic advisers also vowed to work with their counterparts around the world to restore confidence and stability to financial markets roiled by tight credit and worries about a global economic slowdown.
Officials made a number of rapid-fire moves Monday in an effort to demonstrate that the government would not tarry in implementing the new program.
Investors were not reassured. Stocks tumbled, joining a sell-off around the world as fears grew that the financial crisis will cascade through economies globally despite bailout efforts by the U.S. and other governments.
President Bush, speaking in San Antonio, said the rescue package was designed to unlock the nation's frozen credit markets "to get money moving again" through the economy. But he added, "We don't want to rush into the situation and have the program not be effective."
In one of the moves Monday, the Treasury Department released a set of guidelines for selecting the financial asset management firms that will run the program and for guarding against conflicts of interest.
European governments took steps to limit the damage from the growing global financial crisis. Among other things, the governments of Germany, Ireland, Greece and Denmark said they would guarantee bank deposits.
In a fresh effort to loosen dangerous credit clogs, the Federal Reserve said it will significantly expand its loan program to squeezed banks, increasing one program to as much as $900 billion by the end of this year.
The Fed also said it will begin paying interest on commercial banks' reserves, another way to expand the Fed's resources to battle the worst credit crisis in decades.
Congress in the $700 billion bailout bill President Bush signed on Friday gave the Fed the power to pay interest on those reserves for the first time. The law accelerated the effective date to October of this year versus in 2011. That will encourage banks to keep more resources at the central bank.
Treasury said Monday that it would expand the size of its upcoming debt auctions to handle the increased borrowing needs to fund the $700 billion bailout effort, which is expected to buy about $50 billion in troubled assets each month. The department announced that it would auction $100 billion in short-term debt known cash management bills later this week.
Treasury also said it was considering bringing back the three-year note besides expanding the size of other debt auctions.
The statement from the president's working group laid out a number of initiatives that the Treasury, the Fed and other government regulators including the Federal Deposit Insurance Corp. would be undertaking.
"The diversity of institutions and markets under stress, and the magnitude and complexity of the adjustment under way, requires that the tools available to policymakers, regulators and supervisors be used in forceful and coordinated ways across regulatory and supervisory agencies in the United States and throughout the world," the working group said in its statement.
Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG, while France's BNP Paribas agreed to acquire a 75 percent stake in Fortis' Belgium bank after a government rescue failed.
The Dow Jones industrials skidded around 600 points and fell below 10,000 for the first time in four years, while the credit markets remained under strain.
Broader indexes also tumbled. The Standard & Poor's 500 index shed 6.56 percent, the Nasdaq composite index fell 7.24 percent, and The Russell 2000 index of smaller companies dropped 6.69 percent.
Global markets sold off, too. Tokyo's Nikkei 225 index fell to its lowest level in 4 1/2 years, sinking 4.25 percent to 10,473.09. Hong Kong's Hang Seng index slid 5 percent to 16,803.76. Markets in mainland China, Australia, South Korea, India, Singapore and Thailand also dropped sharply.
At the close, Germany's DAX fell 7.1 percent, the FTSE 100 index in Britain slipped 7.9 percent and France's CAC-40 dropped 9.0 percent.
The anxiety was again obvious in the credit markets. The yield on the three-month Treasury bill slipped to 0.42 percent from 0.50 percent late Friday. Demand for bills remains high because of their safety; investors are willing to take extremely low returns just to have their money in a secure place.

(Emphasis with bold, underlined text is mine.)

[ChipOC]

Give y'all a little something to think about. "Closing Cost"

Now, this will mean something different to different age groups.

Some of us remember when $1500.00 was the norm.
Now I've seen CC avg $5 grand. And the sad part is it's not even Closing Cost. It's Pay Offs, and the buyer pays for it for 30 years. Brokers, Buying down Rates, Lawyers, Surveyors, Doc. Fees, Points, Origination Fees (thats always a good one), Mortgage Insurance(another good one). Then you throw in the Down Payment they didn't make, and all of the sudden, the loan they didn't qualify for, is now more, and they can have it tomorrow.

It's a funny world.
Now what is the point of Mortgage Insurance? Wasn't it to cover the banks if the loan defaulted? Ummm, what am I missing here?

[cowboycwr]

Any one see the story today about the Cook County (Illinois/Chicago) Sherriff saying he will not deliver eviction notices to people in buildings where the owner has defaulted? I can't find the story now but it was saying that the building's owner had defaulted on his/their loan and the building was being closed and that the tenants (who apparrantely had all paid rent) were being kicked out.

[KellerBear]

CHICAGO, Illinois (CNN) -- An outraged sheriff in Illinois who refuses to evict "innocent" renters from foreclosed homes criticized mortgage companies Thursday and said the law should protect victims of the mortgage meltdown.

Sheriff Thomas J. Dart said earlier he is suspending foreclosure evictions in Cook County, which includes the city of Chicago.

The county had been on track to reach a record number of evictions, many because of mortgage foreclosures.

Many good tenants are suffering because building owners have fallen behind on their mortgage payments, he said Thursday on CNN's "American Morning."

"These poor people are seeing everything they own put out on the street. ... They've paid their bills, paid them on time. Here we are with a battering ram at the front door going to throw them out. It's gotten insane," he said. Watch Dart slam mortgage companies »

Mortgage companies are supposed to identify a building's occupants before asking for an eviction, but sheriff's deputies routinely find that the mortgage companies have not done so, Dart said.

"This is an example where the banking industry has not done any of the work they should do. It's a piece of paper to them," Dart said. "These mortgage companies ... don't care who's in the building," Dart said Wednesday. "They simply want their money and don't care who gets hurt along the way.

"On top of it all, they want taxpayers to fund their investigative work for them. We're not going to do their jobs for them anymore. We're just not going to evict innocent tenants. It stops today."

Dart said he wants the courts or the state Legislature to establish protections for those most harmed by the mortgage crisis.

In 1999, Cook County had 12,935 mortgage foreclosure cases; in 2006, 18,916 cases were filed, and last year, 32,269 were filed. This year's total is expected to exceed 43,000.

"The people we're interacting with are, many times, oblivious to the financial straits their landlord might be in," Dart said. "They are the innocent victims here, and they are the ones all of us must step up and find some way to protect." Watch sheriff announce he won't evict innocent tenants »

The Illinois Bankers Association opposed the plan, saying that Dart "was elected to uphold the law and to fulfill the legal duties of his office, which include serving eviction notices."

The association said Dart could be found in contempt of court for ignoring court eviction orders.

"The reality is that by ignoring the law and his legal responsibilities, he is carrying out 'vigilantism' at the highest level of an elected official," it said. "The Illinois banking industry is working hard to help troubled homeowners in many ways, but Sheriff Dart's declaration of 'martial law' should not be tolerated."

Dart was undeterred Thursday.

"I think the outrage on my part with them [is] that they could so cavalierly issue documents and have me throw people out of homes who have done absolutely nothing wrong," Dart said. "They played by all the rules.

"I told them, 'You send an agent out, you send somebody out that gives me any type of assurance that the appropriate person is in the house, I will fulfill the order.'

"When you're blindly sending me out to houses where I'm coming across innocent tenant after innocent tenant, I can't keep doing this and have a good conscience about it."

[BearChick]

No, here's to me is what's unforgivable...

People are being bailed out--expecting to be bailed out--for their bad judgment. Homeowners and banks alike used bad judgment. At the root of that was greed--a homeowner trying to get something they couldn't afford and a bank trying to make money off of someone they shouldn't have approved for a loan. At the end of the day, though, the responsibility is on the consumer. I've said plenty of times that I was approved for almost $250K as a single female making $60K a year. I didn't put a dime down on my house. My rate started at 3.3% then rose to 4.3% then locked at 5.3%. I knew I could make the payment at 5.3% so I wasn't concerned. I did learn just how much your property taxes and insurance jump, though. But I made sure I could afford my house before I bought it. I bought a house at a little over half of what I was approved for because I could comfortably afford it. I knew I COULD buy more, but I also knew it was not something I SHOULD do.

When I had to move to Dallas and I didn't sell the house for 9 months, I spent $15K maintaining the house for those 9 months and another $15K when I finally sold the house as I was in the hole. Countrywide was not the least bit interested in helping me. Bank of America did and Wacoso and I worked hard to pay that off, every blankety blank dime. I would sure like to have that $30K back, but it is what it is. That was part of the risk that I took in buying the house (especially with little equity when I sold it). I did not expect someone to go "so sorry, here, no harm no foul."

I lost $30K and no one cared to bail me out (nor should they have)--I mean, I had one of those kind of mortgages, too--through Countrywide, no less. I guess if I'd just sat on it for 3 more years, I would still have my savings intact. Darn.

But here's what really gets me...

Wacoso and I have some friends in Galveston. She's a journalist, he's in ad sales. They're good as gold and some of our good friends on the Island. Two and a half years ago when they moved to Galveston, they bought a nice house that faced the bayou (their across the street neighbors would back up to the bayou and have a boat house and all that jazz). The home was older, but nice. They just did a major kitchen remodel on it, finished 3 weeks before Ike.

When they bought the house, they knew they were living in an area where a hurricane could strike. They wanted to be prepared. They bought enough insurance to cover their mortgage, should the house ever be a total loss--not that they ever expected it to be, but it's best to be prepared, right? They diligently made every payment, even though insurance in a coastal area is ridiculously high and it was, quite honestly, a sacrifice to have that much coverage. But again, it was the prudent thing to do.

Hurricane Ike hit. Their home was actually battered by waves off the bayou--7-8 foot waves. Water was up to the roof. They lost EVERYTHING. But they were prepared, right?

In order to qualify for the Federal Government flood insurance--the insurer of last resort in coastal areas--a municipality has to agree to certain rules, one being that if a home is more than 50% damaged, it has to be condemned. Because there is not a SINGLE major insurance carrier--not Allstate, not Farmer's, not State Farm, NO ONE, who writes flood insurance anymore (they don't even write new homeowner's policies in the area, period) you have to get FEMA flood insurance or you don't get any at all. So, Galveston agreed to the FEMA rules so that people in Galveston could get flood insurance (even though only 16,000 people incredibly took advantage of it).

Well, flood insurance will only pay you for the immediate damage to your home, not anything else.

So, let's use round numbers here. My friends had, say, $100,000 in insurance on their home, enough to cover their mortgage. Remember, they were being prudent. This week, they find out their home has what the adjuster claims is $60K in damage. Keep in mind, EVERYTHING is depreciated when they cut you these checks. They sustained more than 50% damage, so their house is slapped with a big sticker that says it must be demolished. That will cost $30K. Are you following me here?

They can only get $60K from their insurance carrier. They need $100K to pay off the balance of their mortgage. They can never go home to this house again. They have to pay $30K to tear it down. They are SEVENTY THOUSAND DOLLARS IN THE HOLE. They have enough insurance to cover the mortgage, but they aren't allowed to get that full amount. They did the right thing. And now they are $70K in the hole and they have no home, no possessions, NOTHING. And these are just round numbers. They're not actuals.

These are real people. They're dear friends of mine. And they're not the only ones. Galveston is full of this exact same story--lather, rinse, repeat. They did the right thing. They prepared for the worst. They paid on time. And now they have nothing to show for it.

And we're talking about billions--no, trillions--of dollars to bail out people who got greedy and didn't do the right thing. We are one screwed up country tonight, folks.

[Volunteer]

BC, I'm sure your friends know this, but an adjuster's number is not etched in granite. Your friends need a lawyer.

[Volunteer]

Go ahead. I'm listening. But before you start typing, think about me, Vol, TG, and several others you know losing $20, 30 grand every time we look up now. None of us are "big time investors", just guys thats worked all our lives and saved so we could sit on the porch and smile.

Certainly we've all taken a hit. Fortunately I got a little skeptical about the market in April and largely moved away from stocks.

[Volunteer]

Sigh.


This might turn into a long post. We'll see.


The bottom line here is credit. We keep hearing that, and for me and you, all that really means is "consumer credit"--credit cards, home loans, auto loans, etc. In the business sense, however, that's not what credit means.

Let's take an example. Example number 1 is a large construction company. They employ, say, 500 employees. Overall, this is a well-run and profitable company. Obviously, to make money, this company has to have clients and jobs somewhere. For 9 months out of the year, everything is fine and dandy---they have their jobs, they are making their money and everything is peachy. The other 3 months, however, jobs are scarce, but these guys still have a family to feed and they expect their paycheck even in "slow" times. So, how else does this company make payroll during the "slow" times? Credit. Large lines of credit that banks extend to them so they can make payroll for the 3 months of the year that they don't have an influx of jobs.


This, an otherwise profitable business, relies on credit simply to make payroll during a few months of the year. What happens without that credit? Layoffs. Bankruptcy. Higher unemployment.


Granted, I'm not talking about crappy companies who should be gone in the first place, I'm talking about profitable companies who rely on this to stay in business. It doesn't have to be a LOC to make payroll, it can be an LOC just for capital---look at car dealerships. How else do they get inventory except with credit? What happens to a car dealership with no cars? Bankruptcy. You get the idea.


The point of all of that was to illustrate that we aren't just dealing with consumer credit here, and we're not just dealing with "crappy companies who can't make payroll taking out a loan." Credit is VITAL to people keeping their jobs, it's VITAL to a company's ability to produce product, it's VITAL to our economy running properly. Without out, things start happening that you can't even imagine. And I haven't even scratched the surface of the extent of things.


So, the entire point of the bailout was to loosen the credit markets. To get money flowing again, so that these companies can get the credit they need just to sustain life. I'm no expert here and I can't pretend to know the ins and outs of the credit markets, but by all accounts, it's an absolute disaster.

This isn't something that we can wait 6 months for it to happen on its own. This isn't something that will take care of itself in time. Could you go 6 months without getting paid and be "OK?" Could your company go 6 months without conducting ANY BUSINESS and still come out above water?


EVERYBODY is affected when credit disappears. If your company doesn't need the credit for payroll or for expansion capital, I bet someone they work with does. Who buys your company's product? Who SUPPLIES your company with product?


The idea behind the bailout is sickening to me. The fact that the government is having to step into the free market is not something I thought I ever would've supported, but the reality is that there is no way around it if we want our economy to remain intact.

In a general sense a company maintains a line of credit to manage the vagaries of cash flow. As you mentioned this involves payroll. As Donnie mentioned it also involves inventory. I'll throw in that a line of credit essentially smoothes out the ups and downs of cash flow and allows the company to keep payables current.

Tightening credit ain't always a good thing for the economy.

[GigaBear]

In a general sense a company maintains a line of credit to manage the vagaries of cash flow. As you mentioned this involves payroll. As Donnie mentioned it also involves inventory. I'll throw in that a line of credit essentially smoothes out the ups and downs of cash flow and allows the company to keep payables current.

Tightening credit ain't always a good thing for the economy.



Exactly. That's the point I was trying to make. Not only is it not a "good thing" for the economy, it could turn into a straight up depression if enough companies start going out of business and unemployment gets high enough.

[nein51]

Good lord, down another 6XX point today. Ouch.

[Volunteer]

Good lord, down another 6XX point today. Ouch.

I think it might be about as low as it's going to go. Maybe, anyway...........




Anyway, I think it's pretty likely that there's going to be some real estate deals out there - and soon.

[Volunteer]

Good lord, down another 6XX point today. Ouch.


Oh, and panic has clearly reared its ugly head.

[GigaBear]

Good lord, down another 6XX point today. Ouch.


Watch for 7500.

[nein51]

I prefer not watch, the last few days have been brutal on my portfolio. On the plus side my ex only gets half so at this pace she wont be getting much :D

[Bexar Fan]

The federal government has essentially socialized much of our banking system. The news media has failed to report that the Stock Markets plunged with each announcement of major government intervention. Each day the government did not intervene, markets rebounded. In the first four days of trading after the bailout was signed last Friday, the Dow lost nearly 1,800 points, or roughly 20%.

Additionally, the media failed to report the connection between greater federal regulation and bankrupt companies. Before the calamity spilled over to other areas, the only firms that needed a bailout were the ones most heavily regulated by the feds.

All is not lost however! Reuters reported, that a slowdown in the world economy may give the planet a breather from the excessively high CO2 emissions thought responsible for climate change.

Boy, am I relieved. :rolleyes:

[cowboycwr]

The federal government has essentially socialized much of our banking system. The news media has failed to report that the Stock Markets plunged with each announcement of major government intervention. Each day the government did not intervene, markets rebounded. In the first four days of trading after the bailout was signed last Friday, the Dow lost nearly 1,800 points, or roughly 20%.

Additionally, the media failed to report the connection between greater federal regulation and bankrupt companies. Before the calamity spilled over to other areas, the only firms that needed a bailout were the ones most heavily regulated by the feds.

All is not lost however! Reuters reported, that a slowdown in the world economy may give the planet a breather from the excessively high CO2 emissions thought responsible for climate change.

Boy, am I relieved. :rolleyes:

didn't stocks take a pretty big dive the first time the bailout didn't pass?

Edit: I just checked and it went down 700 points that day. Just pointing out that your example of the government doing nothing does not 100% of the time lead to a rebound.

[Bexar Fan]

didn't stocks take a pretty big dive the first time the bailout didn't pass?

Edit: I just checked and it went down 700 points that day. Just pointing out that your example of the government doing nothing does not 100% of the time lead to a rebound.
Correction accepted.

[GigaBear]

didn't stocks take a pretty big dive the first time the bailout didn't pass?

Edit: I just checked and it went down 700 points that day. Just pointing out that your example of the government doing nothing does not 100% of the time lead to a rebound.



Not only that, but this isn't going to be an overnight fix. It's going to take a significant amount of time for this to work itself out.


If something hadn't been done, the perceived "bottom" might be twice as bad as it's current being projected to be.

[Texas Golfer]

Mortgage Backed Securities are like boxes of chocolates. Criminals on Wall Street stole a few chocolates from the boxes and replaced them with turds in plain sight of dishonest politicians in Washington. Their criminal buddies at Standard & Poor rated these boxes AAA Investment Grade chocolates. These boxes were then sold all over the world to investors. Eventually the average taxpayer bites into a turd and discovers the crime. Suddenly nobody trusts American chocolates anymore worldwide.

Hank Paulson now wants the American taxpayers to buy up and hold all these boxes of turd-infested chocolates for $750 billion dollars until the market for turds returns to normal. Meanwhile the Wall Street criminals and banks who stole all the good chocolates are not being investigated, arrested, or indicted. Why? Because Congress had Freddy Mac and Fannie Mae manufacture the turds in the first place.

Mama always said: "Sniff the chocolates first, Forrest".

Forrest is smarter than 99% of all the politicians.

[Limnos]

Do you know the difference between a pigeon and a stock broker?



A pigeon can still make a deposit on a Mercedes.