The Economy

[DavidSeven]

They tell me it's a hot issue right now.

Fed Bails Out AIG with $85 Billion Loan (http://www.nytimes.com/2008/09/17/business/17insure.html?bl&ex=1221796800&en=30e6b5e2e61b3bb9&ei=5087%0A)

[Benny Profane]

"too big to fail"

[Scar]

Well, it's rather brutal here. Right now we are advising all our clients to put everything they've got into canned food and shotguns.

http://upload.wikimedia.org/wikipedia/en/thumb/d/d2/Gremlins2.jpg/350px-Gremlins2.jpg

[Benny Profane]

Have you seen the price of ammo these days? Welcome to Bush's America.

[Scar]

Have you seen the price of ammo these days? Welcome to Bush's America.

Only thing I'm low on is 8mm Mauser, and the load I like is by Sellier & Beloit. Still less then a buck a round, so its all good.

EDIT: And it looks like I might be getting an AR-15 in 6.8SPC for my birthday!

[Malickfan]

I read though that this could be a great time to invest.

[bac0n]

I read though that this could be a great time to invest.

According to Suze Orman (http://www.cnn.com/2008/LIVING/personal/09/17/lkl.suze.orman/index.html), only if you're playing long ball, as if you're not gonna touch it for 15+ years. If you're looking for gains over a period any shorter than that, fahgettaboutit.

[Scar]

I read though that this could be a great time to invest.

Canned foods and shotguns.

[Malickfan]

According to Suze Orman (http://www.cnn.com/2008/LIVING/personal/09/17/lkl.suze.orman/index.html), only if you're playing long ball, as if you're not gonna touch it for 15+ years. If you're looking for gains over a period any shorter than that, fahgettaboutit.

Yeah, I read about it from some billionaire who said that up to 1,000 banks could fail in the coming months.


Canned foods and shotguns.

Either we're gonna be attacked by zombies or The Road is about to happen soon.

[MadMan]

Well, it's rather brutal here. Right now we are advising all our clients to put everything they've got into canned food and shotguns.

http://upload.wikimedia.org/wikipedia/en/thumb/d/d2/Gremlins2.jpg/350px-Gremlins2.jpg:lol: Spot on, man. Spot on.

[Ezee E]

:lol: Spot on, man. Spot on.
1,000 banks? Sheesh. Any further info on that?

[Yxklyx]

I'm considering removing my money from the bank (even though it's a major US bank). It seems this FDIC insurance isn't necessarily all it's cracked up to be - there's a limit the government is liable for. I have no idea what to invest in though. Seems like gold would be a good idea but who can I trust? The value of the dollar is going to take a nose dive (what with the government printing all this money to shore up financial institutions) and it'll probably bring a lot of other currencies down with it - so owning things that are hard and physical seems the best thing, like property, housing, gold, trading cards etc...

[Ezee E]

I'm considering removing my money from the bank (even though it's a major US bank). It seems this FDIC insurance isn't necessarily all it's cracked up to be - there's a limit the government is liable for. I have no idea what to invest in though. Seems like gold would be a good idea but who can I trust? The value of the dollar is going to take a nose dive (what with the government printing all this money to shore up financial institutions) and it'll probably bring a lot of other currencies down with it - so owning things that are hard and physical seems the best thing, like property, housing, gold, trading cards etc...
K-Fan's first printing of The Road? Just an idea!

[Kurosawa Fan]

K-Fan's first printing of The Road? Just an idea!

Take his advice!

[Wryan]

The absolute worst part about all of this is that my bed is an air mattress and thus doesn't rise off the floor and THUS I cannot store any of my money in large coffee cans and tuck them under my bed. THERE'S NO SPACE THERE!

I am fucked.

[Rowland]

Can I trust my money in the bank? Should I take it out?

[Benny Profane]

DJIA up about 360 right now.

Crazy fkn week.

[Scar]

Can I trust my money in the bank? Should I take it out?

If your bank account is FDIC insured, they insure up to 100k.

[Malickfan]

If your bank account is FDIC insured, they insure up to 100k.

Yeah, asked this question to somebody and got this answer...

If your bank is FDIC insured, it is the safest place to have it.

If you have over $100K, just spread your money out at several banks.

[Scar]

Yeah, asked this question to somebody and got this answer...

If your bank is FDIC insured, it is the safest place to have it.

If you have over $100K, just spread your money out at several banks.

And it never hurts to invest in an assault weapon, shotgun, and ammo.

[MadMan]

And it never hurts to invest in an assault weapon, shotgun, and ammo.I have two out of those three. Do I really need the assault weapon? :P

[shaun]

This isn't the 1920s. Your money is perfectly safe in the bank. No need to bury it the backyard just yet.

[bac0n]

This isn't the 1920s. Your money is perfectly safe in the bank. No need to bury it the backyard just yet.

Yes, especially if said bank is made of porcelain and is pig-shaped.

[Ezee E]

I wish I had the benefit of spreading money throughout banks for insurance purposes.

[Yxklyx]

So I figure that we each will roughly give the government at least $3000 to bail out "financial markets". 600 billion divided by 300 million people not all who pay taxes.

[bac0n]

So I figure that we each will roughly give the government at least $3000 to bail out "financial markets". 600 billion divided by 300 million people not all who pay taxes.

eh, I didn't need that 52" 1080p plasma with a built-in compass anyway.

[shaun]

Meh. This administration and Congress doesn't pay for their programs with taxes anyways. They borrow from China and push off the debt to future generations.

More like your grandchildren will pay for it with less buying power against imported goods (from China).

[shaun]

A good write up by a trusted person who works in the securities business. This hasn't been about sub-prime mortgages for a while.

Started a new thread because there is so much misunderstanding about what is going on...

The subprime mess is really over. It has been over for most of a year. Private Equity firms lost between $250 billion and $300 billion in the mess but that fiasco, while it hurt, it doesn't sink an economy.

What is happening now to the credit markets is this.

Everyone knows about Collateralized Debt Obligations of which Mortgage back securities or one part of right? CDO's allow a firm like for example Bear Stearns to buy or sell, essentially, pieces of mortgages. Instead of taking $300,000 risk on John Doe's mortgage they sell 300 pieces of that at $1000 each. Its a funding mechanism that fed the mortgage market for a long long time.

Now our current financial system allowed entities to buy a type of psuedo-insurance called a Credit Default Swap on that debt. The crazy thing about this is speculators can and did buy Credit Default Swaps without holding any assets or proving any real losses on default. Not only that but because its a private contract there is no oversight on their trade. Speculators can make money on proving "credit events" that don't even consitute a real default. For example if ABC credit rating suffers because a rating downgraded their corporate debt the CDS will change its basis points. Anytime there is margin on a oustanding contract....someone makes money.

This trade in derivatives absolutely exploded at the tail end of the real estate boom. We went from roughly $15 trillion in potential liabilities to over $60 trillion in 3 years. From my understanding largely by the hedging of a few speculative entities.

Consequently these speculators are making potentially trillions of dollars by manipulating the credit market downward and boosting defaults. You have financial institutions (i.e. investment banks) that are holding massive amounts of totally unfundable contracts that speculators bet on without having a loss on default or ever even holding an asset. Not only that but we have possibly 5 times the liablilties that we have assets to back them. (Not that it matters because you can collect on them even without default).

Two reasons why the Federal Government has to step-in and stem the blood loss.

1. They are at least partially responsible for causing the initial downturn by stupid monetary policy at the tail end of Greenspan's tenure

2. They should have stepped in and regulated this in the beginning. If not by regulating credit derivatives, then by stepping in when the credit markets were being manipulated.People who want the system to fail as a way of 'sticking it to the corporate pigs' are basically in favor of global apocalyptic scenarios in the vein of Mad Max.

[Wryan]

Whew. It's a good thing I don't understand any of that.

[D_Davis]

I just thought of a brilliant idea.

Rather than bailing out the banks/investment firms with $700 billion, thus making things merely okay, lets give them $1.4 trillion and make things super awesome.

Or, better yet, let's give them a Brazillion dollars and then we can all quit our jobs and live like kings and queens!

[shaun]

Rather than bailing out the banks/investment firms with $700 billion, thus making things merely okay, lets give them $1.4 trillion and make things super awesome.There are two options on the table at the moment. 1. Do nothing and let the free market run its course. 2. Attempt to buy up the debt of financial institutions/securing their credit future, and thereby (and hopefully) avoiding the global catastrophic loss of tens of trillions in liabilities that are tied to credit derivatives (for which there aren't enough assets to cover).

The first option is generally held by people either assuming this is still about risky mortgage lending practices and don't comprehend the gravity of the situation when someone says 'global economic meltdown'. It's not hyperbole. Or, I don't know, people who looks forward to the idea of food lines and the evaporation of most personal wealth.

The second option sucks but unfortunately it's really all we have. 700 billion is a lot of money, like $4k per taxpayer. If nothing is done though, and the economy expectedly crashes into a severe depression, how much do you think the average taxpayer is going to lose between their homes, retirements accounts, job loss, etc?

Then factor in the cost of reduced returns during the recovery because of capital losses during the hit. Then factor in tax dollars spent on the social impact of dealing with the depression (homelessness, welfare, etc). Which hit would you rather take?

The bullet needs to be bit and the derivatives markets need to be regulated. Maybe we (global capitalist society) can come out with only a black eye instead of the scorched earth fuck em all result of letting the financial markets fail.

This was long but it's a situation that can't be written off with a line of snark.

[D_Davis]

This was long but it's a situation that can't be written off with a line of snark.

It's all I got.

[DavidSeven]

I think most people would rather resolve this situation sooner rather than later. If the bailouts bring us closer to normalcy now rather than three, five, ten, or an indefinite number of years from now then the tax burden on each indivudual will be worthwhile in due time.

[Yxklyx]

All I know is that Wall Street seems to make 20% yearly returns and I see none of that so I say screw them all.

[Yxklyx]

Who EXACTLY is this bail-out for anyway?

[shaun]

Uhhh everyone?

Anyone with any investments, be it a home or a retirement account, or I dunno a job, is going to get hammered if our financial markets collapse.

The great depression wasn't caused by the stock market crash. It was caused by there not being any liquidity in the system. If banks have no money, businesses and people can't borrow money and everything tied to the economy goes down the shitter.

WaMu just evaporated because ignorant customers withdrew 16 billion worth of deposits in the past two weeks out of panic. Keep taking your federally insured money out of the bank. Runs on the bank are always a good idea.

[DavidSeven]

All I know is that Wall Street seems to make 20% yearly returns and I see none of that so I say screw them all.

You see it in the value of your home, the availability of credit, employment opportunities, the cost of rent, and all those small businesses and restaurants you love who survive on bank financing and people having disposable cash. The banks aren't independent of everything else. If the markets fail, your quality of life is not going to be the same. Believe it.

[Mysterious Dude]

The second option sucks but unfortunately it's really all we have. 700 billion is a lot of money, like $4k per taxpayer. If nothing is done though, and the economy expectedly crashes into a severe depression, how much do you think the average taxpayer is going to lose between their homes, retirements accounts, job loss, etc?Is the proposed bailout actually coupled with a tax hike, or are they just going to print more money?

[Russ]

WaMu just evaporated because ignorant customers withdrew 16 billion worth of deposits in the past two weeks out of panic. Keep taking your federally insured money out of the bank. Runs on the bank are always a good idea.
My ignorant friend just took 200K of her 300K out of BoA because only 100K is federally insured. She opened up two more accounts at other banks. Curse her ignorance!

[Scar]

My ignorant friend just took 200K of her 300K out of BoA because only 100K is federally insured. She opened up two more accounts at other banks. Curse her ignorance!

There's a difference between spreading it around and sticking it in the mattress.

[Russ]

There's a difference between spreading it around and sticking it in the mattress.
Never said there wasn't.

[shaun]

My ignorant friend just took 200K of her 300K out of BoA because only 100K is federally insured. She opened up two more accounts at other banks. Curse her ignorance!Yes. Clearly I was referring to people who wouldn't be covered by FDIC with that statement. But if your only response if to address my use of an adjective, then by all means, have at it.

[Russ]

Yes. Clearly I was referring to people who wouldn't be covered by FDIC with that statement. But if your only response if to address my use of an adjective, then by all means, have at it.
Well, I think you're fooling yourself if you believe all 16 billion that was withdrawn from WaMu is now being used to, as Scar puts it, stuff mattresses around the nation.

My apologies for not being clairvoyant.

[Yxklyx]

Uhhh everyone?

Anyone with any investments, be it a home or a retirement account, or I dunno a job, is going to get hammered if our financial markets collapse.

The great depression wasn't caused by the stock market crash. It was caused by there not being any liquidity in the system. If banks have no money, businesses and people can't borrow money and everything tied to the economy goes down the shitter.

WaMu just evaporated because ignorant customers withdrew 16 billion worth of deposits in the past two weeks out of panic. Keep taking your federally insured money out of the bank. Runs on the bank are always a good idea.

I don't have any investments to speak of. The retirement account is pitiful. Compared to most other Americans I just don't see myself being affected as much by this. I'm ultra conservative when it comes to what I do with my money. I relish the thought of the stock market crashing - so with my limited knowledge of things I'm against this bailout.

Also note that even the FDIC insurance isn't 100% guaranteed. The Fed has an escape clause if the losses are too great - in case of a catastrophe. I'd love to take my money out of the bank and invest in Gold or something else that isn't going to lose any value when the government starts printing more dollars to cover a bail out - but I don't trust anyone in these times so I'm staying put for the time being. There are very good reasons to take your money out of the bank - it's just not very easy to do - I mean you want to convert it to something that's not dollars (or paper anyway) and you need to trust the conversion process.

Again I ask, who will be getting money from the government?

[shaun]

I relish the thought of the stock market crashing - so with my limited knowledge of things I'm against this bailout.Makes sense to me. I think I referenced people who favor doomsday scenarios in one of my earlier posts as being against keeping the markets alive.

Again I ask, who will be getting money from the government? No one is getting a check if that's what you're asking. The money is to guarantee that any potential defaults on the the money lent out by banks to consumers/businesses does not cause liquidity created bank failures.

This does not mean that the consumers/businesses that borrowed money from the banks for things like mortgages, payroll floats, or speculative commodities transactions are relieved of their debt. What it means is that potentially massive defaults on those debt repayments cannot completely suck the liquidity out of the markets.

It also means that this is not a 700B sunk cost. For the government to lose 700B on this deal, it would mean that every single debt transaction on the books at every bank participating in this bailout would have defaulted. Even during the Great Depression default rates never got higher than 10-15%. A 15% loss would be massive.

[shaun]

Bailout doesn't pass the House. The Dow is about to take an enormous hit.

http://www.msnbc.msn.com/id/26884523/

[D_Davis]

The overriding question for congressional leaders was what to do next. Congress has been trying to adjourn so that its members can go out and campaign.

Fuck you congress. Now is not the time to be concerned about your worthless asses and your jobs. Now is the time to come together and worry about thing other than your sorry selves.

Career politicians can kiss my ass.

[Yxklyx]

Looks like Michael Moore was wrong:

http://www.michaelmoore.com/words/message/index.php?id=235

[Raiders]

Looks like Michael Moore was wrong

What else is new? That whole article is just idiotic.

[DavidSeven]

Looks like Michael Moore was wrong:

http://www.michaelmoore.com/words/message/index.php?id=235

His entire article was wrong before Congress ever voted on the bailout. People should read a thing or two about economics before trying to speak on it.

What's ironic is that if Moore actually knew how this stuff worked, he would know that the bailout is aligned with liberal principles of regulating the market. He's actually supporting the conservative/Republican cause with his article. There's a reason why the Republicans shot it down.

[SirNewt]

I just watched three of the most notable economists (I think two of them had Nobel prizes) on Lou Dobbs last night shoot this plan down.

[Mysterious Dude]

I agree with the Republicans.

Where exactly is the bankrupt U.S. government going to get $700 billion?

[Yxklyx]

I just watched three of the most notable economists (I think two of them had Nobel prizes) on Lou Dobbs last night shoot this plan down.

Which plan? The proposed bailout?

[Yxklyx]

I agree with the Republicans.

Where exactly is the bankrupt U.S. government going to get $700 billion?

Print more money and watch the value of the dollar fall and inflation rise. Governments are always printing more money to cover expenditures.

[DavidSeven]

I just watched three of the most notable economists (I think two of them had Nobel prizes) on Lou Dobbs last night shoot this plan down.

And I could find direct quotes from 20 Econ PHDs supporting the bailout. What's your point? Consensus in the market and a majority of economists and political thinkers is that the bailout is necessary.

[DavidSeven]

How can you guys be against the bailout when you say you don't know how it works in the very same statement?

[Yxklyx]

How can you guys be against the bailout when you say you don't know how it works in the very same statement?

Because we have to trust in the judgment of others and those in who we trust are against the bailout.



...Consensus in the market and a majority of economists and political thinkers is that the bailout is necessary.

Just your saying this doesn't make it so. Where do you get your information from? The media? You trust the media that much on such an issue?

Paulson was nominated by Bush. I have 0% trust in the President or in anyone he nominates.

[Benny Profane]

How can you guys be against the bailout when you say you don't know how it works in the very same statement?

Just wondering, have you read the 100+ page bailout?

[DavidSeven]

Just wondering, have you read the 100+ page bailout?

No. But I believe in the fundamental premise of the bailout and understand how it works in principle. I have to assign some trust to my elected officials to make sure the specifics are in order just as we do for every law and policy that gets passed.

[Benny Profane]

I have to assign some trust to my elected officials to make sure the specifics are in order just as we do for every law and policy that gets passed.

So then why are you so upset it didn't pass yesterday?

[lemon]

Man, three years ago I was seriously thinking of investing in gold with all of my high school graduation money. I really wish I had done that now.

[DavidSeven]

Because we have to trust in the judgment of others and those in who we trust are against the bailout.

Paulson was nominated by Bush. I have 0% trust in the President or in anyone he nominates.

You're contradicting yourself here.


Just your saying this doesn't make it so. Where do you get your information from? The media? You trust the media that much on such an issue?

I get information from the media, but I don't trust it. I studied Finance in undergrad, so I've read enough texts from economists outside of the media. I worked in commercial/residential lending all throughout 2007 and reading up on economic opinions (yes, through the media) became an every day habit for me. I'm no authority on anything, but I think I have a decent grasp of where the consensus lies.

[Yxklyx]

No. But I believe in the fundamental premise of the bailout and understand how it works in principle. I have to assign some trust to my elected officials to make sure the specifics are in order just as we do for every law and policy that gets passed.

I understand your notion of trust - I wish I could feel the same way. I have had trust in our executive branch in the past. Note that the majority of elected officials in the House were against this bill so it would appear that your opinion is in the minority in this regard. The vote was close so I think the situation is not as cut and dry as you believe it to be.

[DavidSeven]

So then why are you so upset it didn't pass yesterday?

Just because I trust them to read the fine print doesn't mean I have to agree with their general policy. Two different things.

[DavidSeven]

I understand your notion of trust - I wish I could feel the same way. I have had trust in our executive branch in the past. Note that the majority of elected officials in the House were against this bill so it would appear that your opinion is in the minority in this regard. The vote was close so I think the situation is not as cut and dry as you believe it to be.

There are too many things going on politically (12 votes swung after a partisan speech... really?) to believe that the result was based entirely on the merit of the bill itself.

[Yxklyx]

Just wondering, have you read the 100+ page bailout?

It would appear that many if not most of the Representatives were not even given the chance to read the bailout bill even if they desired to do so. The House invoked a "martial law" resolution prior to the vote to speed the bill through - so basically, it was being voted on without many not even given the chance to read it. This whole thing sounds very suspicious to me - $700 billion dollars being rushed through like this! I can't but think that there are ulterior motives associated with this bill.

[Benny Profane]

There are too many things going on politically (12 votes swung after a partisan speech... really?) to believe that the result was based entirely on the merit of the bill itself.


Here's some additional detail on the current economic stabilization package (linked at the bottom).

Here are some highlights that are very interesting and very different from what was being reported:

-EXECUTIVE COMPENSATION LIMITS: If the Treasury purchases at least $300 million in mortgage-based assets from a financial institution, that company would lose the ability to take a tax deduction on the amount of salaries that exceed $500,000 for its top five individuals. It also includes a 20% excise tax on golden parachutes payments triggered by events other than retirement.

Ummmm...I read on CNN and Fox that there was a $500K limit for executive pay and golden parachutes had been eliminated. Instead, it just remove the tax deduction for amounts over $500K and taxes the golden parachutes?


-OVERSIGHT: Creates a "Financial Stability Oversight Board" to oversee the program, which includes the chairmen of the Federal Reserve Board, the Securities and Exchange Commission; the Federal Home Finance Agency director and the Housing and Urban Development secretary

Ummmmm....Weren't those the same people in charge (and actually FUELING) this current mess?

I'm sure there is a lot more bullshit in there.

Link (http://news.morningstar.com/newsnet/ViewNews.aspx?article=/DJ/200809281834DOWJONESDJONLINE00 0314_univ.xml)

[shaun]

Being worried about executive compensation at this point is akin to arguing over which color life preserver you're going the throw to the drowning man who just went under. Saving the economy should come first, then you can decide which regulations and oversight would keep this from happening again.

I don't care that the CEO of Goldman Sachs gets paid $20m a year and especially not when people like Carlos Silva are getting $10m to do ultimately meaningless jobs like shitting up pitching staffs.

[Benny Profane]

Carlos Silva's business practices didn't fuck us up to begin with though. And now you're going to hand these clowns a bunch more money, with the same clowns in charge of oversight, and ram this bill through without proper debate?

It's a fiasco. This is going to take a lot more time to hammer out than a week.

[shaun]

Carlos Silva's business practices didn't fuck us up to begin with though. And now you're going to hand these clowns a bunch more moneyWe're not GIVING money to anyone. The government is buying up the undervalued debt of banks that can't sell it to investors because of credit liabilities, not because the debt holds no value. We do this all the time, just not to this scale and not under the media banner of 'bailing out wall street'.

This is the system that's in place due to deregulation, using simplified examples. You buy a house using a 300k mortgage that's well within your means and proceed to make every payment on time. Your asset is valued at 300k; Bank A holds that debt. Bank B takes out an insurance policy against default (a CDS) on Bank A's debt to the tune of $1.2m. There is now $1.5m in obligations tied to the fairly valued 300k asset. Your debt, that you've responsibly taken on, is now toxic. No investor will touch it. Not because it holds no value, but because of the liabilities tied it.

The government buying up the debt erases the possibility of default on the debt since it's secured and effectively removes the CDS liabilities tied to them. Investor concerns are assuaged... birding chirping, sunny days, no soup kitchen today.

[Duncan]

Print more money and watch the value of the dollar fall and inflation rise. Governments are always printing more money to cover expenditures.

This is not true. As I understand it, the toxic securities are not being bought with money. They are being bought with treasury bonds (t-bills). So it would work like this:

1. The government issues enough t-bills to cover the cost of the toxic securities (to a max of $700 billion) and just gives companies these bonds. No money is exchanged. Treasury bonds have low interest rates and long maturities.
2. This removes the risk from companies and banks and transfers it to the tax payer.
3. Financial institutions now have liquidity and can lend and borrow from one another again because a large uncertainty factor has been removed.
4a. The government then has to sell off those securities to buy back the t-bills that they gave away. However, t-bills don't mature for 10, 20, 30 years. In the meantime, people are still paying off those mortgages, and forclosure rates of above 15% are highly, highly unlikely. So all those mortgage payments are going to the goverment. Of those that do get foreclosed on, the government will have to take a loss on
4b. Alternatively, the governement can just sell all those securities at whatever the market deems the proper price (way below what they had pay for them and take a loss). On the other hand, maybe 5 years down the road the housing market picks up again and the government could even turn a profit by selling those securities.

So let's say the government is forced to issue all $700 billion dollars worth of t-bills and over the next 10 years makes only $500 billion back. That's a pretty serious loss. That will probably have to be made up in tax revenue, which is unfortunate and probably why so many people are against the bill.

Nevertheless, I look at the financial situation and I see an abyss if the government doesn't intervene. I see utter collapse.

[Duncan]

Pretty good article (http://www.nytimes.com/2008/09/30/business/yourmoney/30money.html?em)that answers some practical questions.

[Benny Profane]

We're not GIVING money to anyone. The government is buying up the undervalued debt of banks that can't sell it to investors because of credit liabilities, not because the debt holds no value. We do this all the time, just not to this scale and not under the media banner of 'bailing out wall street'.



Socialize the risk, privatize the profits.

[Duncan]

Good op-ed (http://www.nytimes.com/2008/09/30/opinion/30brooks.html?em) from the NYTimes.

[shaun]

Except that the government buying undervalued debt socializes the risk but also socializes any potential profits.

If I owe you $100 and you're in desperate need of cash (like the banks are) and are willing to sell that debt to Duncan for $80 up front, you're not profiting on the deal.

[SirNewt]

There are too many things going on politically (12 votes swung after a partisan speech... really?) to believe that the result was based entirely on the merit of the bill itself.

David, is there a precedent for a country doing this on a smaller scale?

How do we know the banks will really let this money flow down the chain? Even with $700 bil floating around they'll still be nervous about the economy. Mightn't they loan exclusively to other large companies who are more likely to pay them back? Won't that give big business yet another advantage of small business?

[lemon]

Well the Dow finished up 500 points today. I don't see the bail out getting passed anytime soon.

[DavidSeven]

David, is there a precedent for a country doing this on a smaller scale?

The U.S. and other capitalist countries are doing this all the time on a smaller scale.

After 9/11, the U.S. government bailed out the airline industry with a $10 billion loan program. In the end, they only ended up lending out $1 billion and the government ended up making strong returns on the stocks they got in exchange.

U.S. Precedent:


A student of the Depression, Federal Reserve Chairman Ben Bernanke well knows that the government's slowness to step in following the Crash of 1929 is often blamed for contributing to what turned out to be a full decade of economic misery. By the time the government took comprehensive action, unemployment was 25 percent, much of the steel business had disappeared, and thousands of homeowners a week were losing their houses to banks.

The Hoover administration created the Reconstruction Finance Corp. in 1932 to spur economic activity by first lending money to financial, industrial and agricultural institutions, then injecting capital into thousands of banks by investing in their preferred stock.

The RFC fared well financially and did not ultimately prove a costly burden for taxpayers, according to Richard Sylla, financial historian and economist at New York University's Stern School of Business. By the time it closed up shop in 1957, it had made loans of about $50 billion.

The same held true for the Home Owners' Loan Corp., started under FDR in 1933 as part of the New Deal. The agency helped stop a flood of foreclosures by buying $3 billion worth of defaulted mortgages and refinancing more than a million loans at lower rates and longer terms.

The government also created the Federal Deposit Insurance Corp. the same year, guaranteeing the safety of checking and savings deposits in member banks following a wave of bank failures.

As with many interventions, the notion of the government putting taxpayers on the hook for a huge financial burden was not popular at first.

"The 1930s reforms were detested at the time," Sylla said, describing the initial public reaction. "But later on people said they really were pretty good."


How do we know the banks will really let this money flow down the chain? Even with $700 bil floating around they'll still be nervous about the economy. Mightn't they loan exclusively to other large companies who are more likely to pay them back? Won't that give big business yet another advantage of small business

This is not a cash giveaway or even the kind of "loan" that we're all familiar with. The government is exchanging T-bills with low interest rates for mortgage backed assets. To break it down in simple terms (and sort of repeat what Duncan already said):

The banks get t-bills that will be purchased back by the government somewhere in the future. The low interest rate means the banks aren't earning strong gains on these securities, but at least they don't have to worry about them defaulting. The removal of this "risk" allows them to open up credit to small, midsize, and large companies as well as consumers. John Smith with good credit on Main Street can stop worrying about cash flow for his small business because he knows banks will lend him the money to continue operating in the short run. Knowing he can get a credit line means that he doesn't have to fire Mary Jo over in accounting because he doesn't have the cash necessary to pay her.


The government takes on all of the risky consumer/commercial mortgages. They're not relying on banks being able to pay back loans, so one banks viability relative to another is completely irrelevent. They're primarily relying on consumers being able to pay off their mortgages. If economic conditions improve and home values go up then there's a decent chance that the government could turn a profit, and there will be no added tax burden to U.S. citizens.

[DavidSeven]

Well the Dow finished up 500 points today. I don't see the bail out getting passed anytime soon.

The rebound is tied to optimism that the government will revive the bill and get it passed. If it's rejected again, expect another colossal drop.

[SirNewt]

The U.S. and other capitalist countries are doing this all the time on a smaller scale.

After 9/11, the U.S. government bailed out the airline industry with a $10 billion loan program. In the end, they only ended up lending out $1 billion and the government ended up making strong returns on the stocks they got in exchange.

U.S. Precedent:





This is not a cash giveaway or even the kind of "loan" that we're all familiar with. The government is exchanging T-bills with low interest rates for mortgage backed assets. To break it down in simple terms (and sort of repeat what Duncan already said):

The banks get t-bills that will be purchased back by the government somewhere in the future. The low interest rate means the banks aren't earning strong gains on these securities, but at least they don't have to worry about them defaulting. The removal of this "risk" allows them to open up credit to small, midsize, and large companies as well as consumers. John Smith with good credit on Main Street can stop worrying about cash flow for his small business because he knows banks will lend him the money to continue operating in the short run. Knowing he can get a credit line means that he doesn't have to fire Mary Jo over in accounting because he doesn't have the cash necessary to pay her.


The government takes on all of the risky consumer/commercial mortgages. They're not relying on banks being able to pay back loans, so one banks viability relative to another is completely irrelevent. They're primarily relying on consumers being able to pay off their mortgages. If economic conditions improve and home values go up then there's a decent chance that the government could turn a profit, and there will be no added tax burden to U.S. citizens.


I see, so how long did the government wait to act in 29? Do we even have that long?

What I mean to ask is do we have any idea how long between the first disaster (the first bailouts) and utter collapse? How long can the government prick around before it's too late? (We probably don't know the answer to this question)

[DavidSeven]

I see, so how long did the government wait to act in 29? Do we even have that long?

What I mean to ask is do we have any idea how long between the first disaster (the first bailouts) and utter collapse? How long can the government prick around before it's too late? (We probably don't know the answer to this question)

It wasn't until Roosevelt took office in 1933 that the government took significant action. Hoover (president at the time of the crash) was a conservative and took the "market will correct itself" approach. By the time he actually decided to do something, three years after the crash, we were already in the shit. It's impossible to say how much time we have before that scenario becomes a reality for us, but I think action sooner, rather than later, would be optimal.

[Ezee E]

It wasn't until Roosevelt took office in 1933 that the government took significant action. Hoover (president at the time of the crash) was a conservative and took the "market will correct itself" approach. By the time he actually decided to do something, three years after the crash, we were already in the shit. It's impossible to say how much time we have before that scenario becomes a reality for us, but I think action sooner, rather than later, would be optimal.
Republicans should go for it now, so that in four years they get back in the office again, and can put the blame on the inexperienced Barack.

[Barty]

One of the biggest misconceptions is that Hoover did nothing, it's a complete fabrication. He signed the Smoot-Hawley Tariff, which destroyed the economy and trade of the US, and signed massive tax increases on everybody that further plunged the economy down and lengthened the depression. Too bad his reputation for doing nothing is unearned, because if it was true the US would have been better off for it.

[DavidSeven]

Senate to vote on financial bailout tonight (http://www.reuters.com/article/topNews/idUSTRE48T8UP20081001?pageNumb er=3&virtualBrandChannel=10112)

Some pieces added to the rescue plan:

1. The Senate bill would increase to $250,000 from $100,000 the amount of individual deposits the Federal Deposit Insurance Corp insures.
2. A package to extend business and energy tax breaks that a number of House Democrats have opposed. Also some breaks for individuals in the middle class.

Increasing the FDIC limit is a shot at gaining more public support (which supposedly has swung in favor of the bailout after Monday's vote). The company tax breaks are a concession to get Senate Republicans on board.

[Kurosawa Fan]

I was watching Rachel Maddow last night, and Kucinich was on and spoke of an idea being tossed around, that started with a congressman from Oregon. Here's the video (http://blueherald.com/2008/09/dennis-kucinich-on-rachel-maddow-93008/).

This seems like a much safer bet to me.

[Benny Profane]

"This plan is immoral. This plan is a disgrace."

Agreed Denis. I wrote my Senator this morning. No to this bailout.

[Raiders]

One of the biggest misconceptions is that Hoover did nothing, it's a complete fabrication.

The point is more that he didn't act very quickly.


He signed the Smoot-Hawley Tariff, which destroyed the economy and trade of the US

The actual effects of this on the Depression are up for debate (I believe exports accounted for less than 5% of the GNP). It definitely hurt the exports because it caused other nations to retaliate by increasing their tariffs for imports from the US. To this day I don't think people will understand why the man signed it.


and signed massive tax increases on everybody that further plunged the economy down and lengthened the depression.

This is true, but in relation to his presidency and the Great Depression, it was a rather last-minute effort signed in 1932. The point is, he had done nothing useful until this point and the government was in desperate need of money, so they passed legislation more than doubling taxes, which of course simply contracted spending and pushed everyone further into Depression.

The biggest example of his reluctance to actually do something is the NCC, where he made no official legislation but rather simply requested member banks lend to smaller entities, which they had no incentive to do.


Too bad his reputation for doing nothing is unearned, because if it was true the US would have been better off for it.

This is purely speculative.

[Raiders]

"This plan is immoral. This plan is a disgrace."

Agreed Denis. I wrote my Senator this morning. No to this bailout.

More from Kucinich:

http://www.democracynow.org/2008/9/29/is_this_the_united_states_cong ress

[DavidSeven]

I was watching Rachel Maddow last night, and Kucinich was on and spoke of an idea being tossed around, that started with a congressman from Oregon. Here's the video (http://blueherald.com/2008/09/dennis-kucinich-on-rachel-maddow-93008/).

This seems like a much safer bet to me.

Nice plan in theory, but there's no way a bottom-up approach gets enough Republican support to pass. The deal, in its current state, probably isn't ideal for anyone, but it represents the one that protects the most bipartisan interests. You also have to question whether the money would "trickle up" fast enough to save the markets or if people would be too prudent, given how scared they are, to do anything with the savings. In principle, it seems like the same approach Bush took with his tax rebates, which really seemed to provide a minimal benefit to the overall economy.

As for the question of morality, that's working under the assumption that the blame gets placed squarely on Wall Street and that irresponsible borrowers are admonished. What about the responsible borrowers who didn't take on toxic mortgages? Aren't they getting screwed either way? On the basis of morality, I don't think the bottom-up plan holds anymore weight. Shouldn't we base morality on doing what's best for the greater good anyway? Let go of the notion that a few rich guys on Wall Street will potentially be saved, and start thinking about how everyone can benefit.

[shaun]

1. The Senate bill would increase to $250,000 from $100,000 the amount of individual deposits the Federal Deposit Insurance Corp insures.
2. A package to extend business and energy tax breaks that a number of House Democrats have opposed. Also some breaks for individuals in the middle class.
Not having read the details of the tax breaks, if those are the main changes, there's essentially no change and anyone voting no on ideology or misguided partisanship probably aren't going to change their minds.

Hopefully sanity prevails and the Senate is slightly more informed. And then has sway with the House.

[Benny Profane]

My problem is that the CDO (collateralized debt obligations) that the Government will essentially cover are the "toxic" ones. They are also covering them at YESTERDAY'S prices. Most of those are difficult to value, admittedly. However, most of those "takeovers" being done or shares being bought from one financial company to another are being done for pennies on the dollar. The Government doesn't have the staff to do all those valuations and will be buying at yesterday's original pricing. You and I both know that they aren't worth that anymore since people can't pay.


My letter to Senator Bob Casey:


Sen Casey,

I recognize the gravity of the situation surrounding our financial markets. I also recognize that many economists feel that a bail-out is necessary for our financial futures and to stave off a second Great Depression. However, it is the opinion of many other prominent economists that the need for a bail-out is overstated by those with a vested interest.

Therefore, I urge that you as OUR representative not vote for a bill that is being pushed quickly without careful review. I can not understand:

* why there are not any public hearings

* why the money needs to be provided as a single disbursement

* why the cutting of the golden parachute was modified to not allow tax breaks

* why there cannot be a graded response such that the valuation of the assets being purchased by the government can be accurately valuated overtime so that WE (taxpayers) are not purchasing CDOs at yesterday's value

* why the urgency and sheer recklessness by an Administration that has been marked by utter incompetence being the driving force during a time of transition at EVERY Administrative level?

Now is the time for caution, prudence, careful evaluation and complete transparency. We need these hearings to be made public. I think if you have the ability to ask the American People for 700 billion dollars, then we have the RIGHT to listen in to the reasoning for it. I can not agree with things as they stand. Certainly not without significantly more information and some protections to the tax payers AND those who stand to lose homes and/or retirement savings. Those retirement savings ought to be moved over to preferred stock rather than the toxic stock being offered to the tax payers.

Thank you.

[Benny Profane]

I love how the public is given less than 10 hours to look at this thing before a Senate vote. This is not the sort of thing that should be rushed. Chill the fk out.

[Benny Profane]

House of Representatives' Website is Overwhelmed (http://www.cnn.com/2008/POLITICS/09/30/congress.website/index.html)

Apparently they don't even have the IT infrastructure in place to deal with all the emails. But let's just ignore what the public thinks and ram this baby home.

[DavidSeven]

And how much of the public is going to look at this thing in detail? The only thing I see being accomplished by waiting is the addition of a bunch of useless provisions, so a bunch of worthless rhetoric can be thrown at the public. Just look at the new revisions to the plan. They're saying, "hey, the government will insure more of your money!" But how many people really hold more than $100,000 in a single account? The revision is worthless, but it allows politicians to talk about how the new plan is insuring more of the public's money. You also have to consider that the Republicans are the ones that are primarily opposed to this. To get them to change their votes, you're going to have to add provisions that are in their favor. That means reduced business taxes (see current revisions) and other provisions that are not likely to be interested in public welfare. The more we wait, the more red tape you're going to see, and the cost to the public is just going to get incrementally higher.

Edit: Also, I understand the points you raise in your letter and they are valid. I think, however, a benefit/risk analysis favors getting the bailout done sooner. It's not going to be perfect -- that's for sure. But in waiting, I just see the potential to make this plan even worse than it is. Just look at all the bills that get proposed in Congress with a million and a half additional laws that are unrelated to the laws being directly addressed.

[Benny Profane]

Small businesses, like mine, hold more than 100K in an account.

[D_Davis]

Surprise buttsecks?

[Benny Profane]

I would also like to know how the FDIC is going to insure 2 trillion when they have about 600 billion.

[Benny Profane]

Edit: Also, I understand the points you raise in your letter and they are valid. I think, however, a benefit/risk analysis favors getting the bailout done sooner. It's not going to be perfect -- that's for sure. But in waiting, I just see the potential to make this plan even worse than it is. Just look at all the bills that get proposed in Congress with a million and a half additional laws that are unrelated to the laws being directly addressed.

So you're OK with:

- No alternatives being discussed or offered

- An incompetent administration rushing this through without proper debate and review




This is $700 billion we're talking about here. This is not your ordinary bill. The whole point of a strong democracy is that while it may take longer to achieve the desired goal, the process vaccinates you from mistakes.

[DavidSeven]

So you're OK with:

- No alternatives being discussed or offered

- An incompetent administration rushing this through without proper debate and review

This is $700 billion we're talking about here. This is not your ordinary bill. The whole point of a strong democracy is that while it may take longer to achieve the desired goal, the process vaccinates you from mistakes.

This thing has been discussed since August of 2007 and the government has tried several things to improve the situation. Just because this is the first time we've seen the plan doesn't mean that it hasn't been thought about thoroughly. If this was a partisan bill then I would share your concern about the Bush admin trying to rush this through. The bipartisan support for the bill means that several interests are being covered here. No; it's not a perfect plan. No; it's not guarenteed or even 90% sure that it will work the way we hope it will. But the fact is that it's going to passed in some form or another because the goverment can't afford to chance the social unrest that comes with a prolonged economic downturn. I'd rather see it be passed in as pure a form as possible... free from the ultimately useless politicizing that will come the longer we mull over it.

[bac0n]

http://i3.photobucket.com/albums/y82/DVR9/n617018168_1432442_1066.jpg

[DavidSeven]

Bailout is a done deal. (http://www.nytimes.com/2008/10/04/business/economy/04bailout.html?_r=1&hp&oref=slogin)

[DavidSeven]

Apparently, the plan has gone from its original three page bare-bones proposal to 450 pages of pork (completely unrelated sweeteners to get politicians to change their vote). This is what happens when you wait to do something in D.C.

Top Ten Sweeteners in the Bailout Bill (http://www.taxpayer.net/resources.php?category=&type=Project&proj_id=1429&action=Headlines%20By%20TCS) (including tax breaks for wooden arrow makers and Nascar).


I'd rather see it be passed in as pure a form as possible... free from the ultimately useless politicizing that will come the longer we mull over it.

Oh well...

[Barty]

:frustrated:

[soitgoes...]

Top Ten Sweeteners in the Bailout Bill (http://www.taxpayer.net/resources.php?category=&type=Project&proj_id=1429&action=Headlines%20By%20TCS) (including tax breaks for wooden arrow makers and Nascar).
Um, apparently the wooden arrow maker part was introduced by my Oregon senators. This will undoubtedly be a boon for us Oregonians who see the vital importance traditional shaft technology will have in the future up here in the Northwest. Especially when the Siuslaw, Umpqua and Clackamas tribes finally rise up and take back their lands.

[D_Davis]

Apparently, the plan has gone from its original three page bare-bones proposal to 450 pages of pork (completely unrelated sweeteners to get politicians to change their vote). This is what happens when you wait to do something in D.C.

Top Ten Sweeteners in the Bailout Bill (http://www.taxpayer.net/resources.php?category=&type=Project&proj_id=1429&action=Headlines%20By%20TCS) (including tax breaks for wooden arrow makers and Nascar).



Oh well...

http://img522.imageshack.us/img522/1391/lemonpartyfa2.gif

[D_Davis]

Fuck Washington DC.

If they felt the need to pass the bill, fine. I don't know enough about the economy to argue either way.

But when a bill is passed ONLY so that all the shit tied to it gets passed, well, that's just bullshit in it purest, smelliest form.

[DavidSeven]

BofA in $8.6 billion settlement over Countrywide loans (http://www.reuters.com/article/ousiv/idUSTRE4953T620081006)

[Benny Profane]

Here's an explanation of the bailout for mortgage holders. If it's setup as they explain, you could have 2 neighbors who bought the same house at the same time for the same price ($450,000).

Neighbor one pays his bills on time. Neighbor two needs a bailout.

Neighbor 1 pays roughly $2,700 per month before taxes and insurance. Neighbor two pays $1,900 per month before taxes and insurance.

So, in essence, for contributing to the tanking the economy and being a general piece of shit, Neighbor two gets to save $10,000 per year over neighbor one and can sell their house without taking a loss.

Neighbor 1, as a prize for being responsible, is stuck in their house for 10 years until their equity it recouped to the point where they could sell it and break even, while spending $100,000 more in additional payments over shitbag neighbor.

Someone please tell me this isn't correct. I imagine ax related homicides will rise sharply if it is, because I know I'd kill my neighbor.


Link (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/02/BU6U139QH7.DTL)

[DavidSeven]

Yikes. I haven't looked at the details so I can't confirm, but that sounds like a smaller scale version of what Kucinich was endorsing in his anti-bailout tirade. This is why I didn't think the "trickle up" approach was any more morally legitimate than the plan they just passed. It only sounds more noble on very superficial level.

[shaun]

Dow under 10k.

weeeeeeeeeeeeeeeeee....

[Scar]

Here's an explanation of the bailout for mortgage holders. If it's setup as they explain, you could have 2 neighbors who bought the same house at the same time for the same price ($450,000).

Neighbor one pays his bills on time. Neighbor two needs a bailout.

Neighbor 1 pays roughly $2,700 per month before taxes and insurance. Neighbor two pays $1,900 per month before taxes and insurance.

So, in essence, for contributing to the tanking the economy and being a general piece of shit, Neighbor two gets to save $10,000 per year over neighbor one and can sell their house without taking a loss.

Neighbor 1, as a prize for being responsible, is stuck in their house for 10 years until their equity it recouped to the point where they could sell it and break even, while spending $100,000 more in additional payments over shitbag neighbor.

Someone please tell me this isn't correct. I imagine ax related homicides will rise sharply if it is, because I know I'd kill my neighbor.


Link (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/02/BU6U139QH7.DTL)

I just read it.

Urge to kill.... Rising.

[Barty]

So much for the bailout.

[Benny Profane]

I think it's obvious nobody wanted this.

[Raiders]

So much for the bailout.

So much for the European markets.

[Ezee E]

Yeah


As the U.S. tries to repair its battered banking system, the German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG. And France's BNP Paribas agreed to acquire a 75 percent stake in Fortis's Belgium bank after a government rescue failed.

[Barty]

So much for the European markets.

Only proves my points even further.

[DavidSeven]

So much for the bailout.

Uh, no.

"The catalyst for the selling was the growing realization that the Bush administration's $700 billion rescue plan and steps taken by other governments won't work quickly to unfreeze the credit markets."

A drop of this magnitude, and most likely greater, would have occurred if the bailout didn't pass. The focus is on the frozen credit markets. No one said the bailout would unfreeze credit markets immediately. It's going to take time as banks can start dumping their toxic securities and re-evaluate the amount of risk they can take on. To assume this could be accomplished over a 24-48 hour period is absurd and shows a lack of understanding of the markets. Every lawmaker who pushed the bill said we wouldn't see results for a long time (most likely years).

[Barty]

Uh, no.

"The catalyst for the selling was the growing realization that the Bush administration's $700 billion rescue plan and steps taken by other governments won't work quickly to unfreeze the credit markets."

A drop of this magnitude, and most likely greater, would have occurred if the bailout didn't pass. The focus is on the frozen credit markets. No one said the bailout would unfreeze credit markets immediately. It's going to take time as banks can start dumping their toxic securities and re-evaluate the amount of risk they can take on. To assume this could be accomplished over a 24-48 hour period is absurd and shows a lack of understanding of the markets. Every lawmaker who pushed the bill said we wouldn't see results for a long time (most likely years).

In other words, the market has to readjust itself just as I've always said. The bailout is just the first act in the next boom and bust cycle.

[Raiders]

In other words, the market has to readjust itself just as I've always said. The bailout is just the first act in the next boom and bust cycle.

Yes, as everyone who took Econ 101 knows, the economy and the stock market by extension are cyclical and it is ridiculous to try and prevent this. But the extent of that cycle, how far up and down it goes and how long it lasts, is very dependent upon the actions taken in the particular cycle.

In other words, I really don't get what you're saying.

[Barty]

Yes, as everyone who took Econ 101 knows, the economy and the stock market by extension are cyclical. But the extent of that cycle, how far up and down it goes and how long it lasts, is very dependent upon the actions taken in the particular cycle.

In other words, I really don't get what you're saying.

What I'm saying is the reason it's so cyclical is because of artificial controls and stimulation's, and because of the actions taken during these cycles which almost always just leads to more problems down the line.

[shaun]

Nice buyback rally in the 3pm hour. Was down about 800 at one point.

[Benny Profane]

EVERYBODY PANIC!

EVERYBODY CELEBRATE!

These seem to be the only two investing strategies on Wall Street.

[DavidSeven]

In other words, the market has to readjust itself just as I've always said. The bailout is just the first act in the next boom and bust cycle.

The purpose of the bailout is to get the economy out of the down cycle in a few years rather than in a decade or longer. The market is cyclical with or without regulation.

[Barty]

The purpose of the bailout is to get the economy out of the down cycle in a few years rather than in a decade or longer. The market is cyclical with or without regulation.

The market is cyclical because of the expansion of credit by the Fed. The bailout is merely the first step in the next credit boom, which will lead to the next bust, and thus more bailouts and credit expansion. It's an unsustainable system, which will ultimately lead to an unmitigated disaster.

[Duncan]

The market is cyclical because of the expansion of credit by the Fed. The bailout is merely the first step in the next credit boom, which will lead to the next bust, and thus more bailouts and credit expansion. It's an unsustainable system, which will ultimately lead to an unmitigated disaster.

Barty do you seriously believe the Fed is the reason for cyclical markets? You know capitalism is a lot older than the Fed, right? And that it's always been cyclical?

[shaun]

The bailout package is to protect our banking infrastructure and not individual companies or the market index so aside from watching my 401k reach a new negative YTD milestone, there's nothing really to be gleaned from today's action.

Lots of nerves and anxiety are pulling money out stocks. That money either goes into bonds, banks, or for the colander wearing crowd, under their mattress.

[Barty]

Barty do you seriously believe the Fed is the reason for cyclical markets? You know capitalism is a lot older than the Fed, right? And that it's always been cyclical?

We do not have true Capitalism, only a form of it. And yes, the Fed is the reason for the cyclical markets. The boom-bust cycle we have is a recent phenomena brought on by the Fed. Your definition of a cyclical economy pre 20th century is not the same as we have now. The Fed most certainly deserves the majority of the blame.

[DavidSeven]

The market is cyclical because of the expansion of credit by the Fed. The bailout is merely the first step in the next credit boom, which will lead to the next bust, and thus more bailouts and credit expansion. It's an unsustainable system, which will ultimately lead to an unmitigated disaster.

Government policy can be responsible for market cycles, but it's not always the cause and is rarely (if ever in the U.S.) responsible for a massive collapse. A major crisis, in modern times, comes about when the market puts real money into speculative investments creating a bubble of confidence (1920s stock market, late 90s internet boom, and subprime mortgages). When those investments fail, the bubble bursts and we have a crisis.

Cycles are inevitable and will occur regardless of how regulated the market is. There's a reason, however, why our most severe downturns have come on the heels of the country following conservative economic policy (1920s, Reagan economics, W. Bush administration).

[Barty]

Government policy can be responsible for market cycles, but it's not always the cause and is rarely (if ever in the U.S.) responsible for a massive collapse. A major crisis comes about when the market puts real money into speculative investments creating a bubble of confidence (1920s stock market, late 90s internet boom, and subprime mortgages). When those investments fail, the bubble bursts and we have a crisis.

The bubble would not exist if it wasn't for the free expansion of credit by the Fed. The reason so much money is put in risky ventures and the bust happens is because the easy availability of credit allows for it. The government encourages it. The Fed creates credit out of thin air for the banks. Mises demonstrated this and could predict the booms and busts of his time because of it.


Cycles are inevitable and will occur regardless of how regulated the market is. There's a reason, however. why our most severe downturns have come on the heels of the country following conservative economic policy (1920s, Reagan economics, W. Bush administration).

It has nothing to do with who's in office, other than what policy's they choose to enact to "help" respond to the inevitable bust. And by that, I mean the interventionist action they take to make things worse. There's a reason the Recession in 1921 was quick and painful, but you never hear about it. The government didn't do anything to try to correct the market, and it corrected itself immediately and everyone was better off for it.

On the contrary, your assertion falls apart because the Facist murdering policies of FDR extended the Depression by years and only made things worse.

Since the Fed is a private institution, it is completely independent of who's President.

[Raiders]

There's a reason the Recession in 1921 was quick and painful, but you never hear about it. The government didn't do anything to try to correct the market, and it corrected itself immediately and everyone was better off for it.

Yes, there didn't need to be any intervention because the recession was a slowdown following World War I production highs and unemployment increase from returning soldiers. We were fortunate that the women were willing to give up their jobs to men and that the wages and workers' rights could fall so rapidly as to allow us to regain equilibrium.

It was not quick and painless for many other countries around the world.

[Barty]

Yes, there didn't need to be any intervention because the recession was a slowdown following World War I production highs and unemployment increase from returning soldiers. We were fortunate that the women were willing to give up their jobs to men and that the wages and workers' rights could fall so rapidly as to allow us to regain equilibrium.


This demonstrates my point exactly, thank you.

[DavidSeven]

Barty, economic cycles were identified and theory existed about them long before there was ever a Fed. I mean, come on, Karl Marx was talking about economic cycles in capitalism in the 1800s.

You're apparently working under the presumption that a completely free market economy could actually reach a perfect equilibrium of supply/demand and could never, ever deviate from that position. I don't even think pretty hardcore conservatives believe that. Not every aspect of life can run like a math equation. Even with things in real life that can be predicted upon statistics, there's always deviation, margin of error, or whatever you want to call it. This requires adjustment, and that is what we know, in economics, as a cycle. You're ideal market just isn't feasible. Maybe we would be better off without government intervention (I don't think so), but to say the market would not be cyclical in a free market is absurd.

[D_Davis]

http://www.geocline.net/miscimages/Over9000_small.jpg

[soitgoes...]

Asian stock markets got drilled, the Nikkei fell 9% (24% in the last 2 weeks). I wonder what this means for the Dow tomorrow? Sub-9000 perhaps. The Asian markets are reacting to Wall Street, but will Wall Street keep the circuitous downfall between Asia, Europe and NYSE? The world is going to be deep in the shit, like scary deep, by the end of the month.

[Scar]

U.S. stock futures turn sharply higher on emergency rate cut.

http://biz.yahoo.com/ap/081008/wall_street.html

[Yxklyx]

U.S. stock futures turn sharply higher on emergency rate cut.

http://biz.yahoo.com/ap/081008/wall_street.html

You can only go so low. Down to 1.5 from 2.

[DavidSeven]

Sub-9000 is a reality. Another 700 point drop. From 12 months ago: Down is down 33%; S&P 500 is down 37%; and Nasdaq is down 40%.


Investors are trying to get accustomed to the new realities of the market, but aren't able to just yet, despite all the government actions, said Gary Webb, CEO at Webb Financial Group.

"What the Fed has done is eventually going to help turn things around, but people don't believe it yet," Webb said. "They're acting on fear."

[Raiders]

So sad:

http://www.abc.net.au/news/stories/2008/10/10/2387104.htm?section=business

:lol:

[shaun]

There's a lot of fear and anxiety driving the selloff and it's somewhat understandable for the older generations. My 401k and various other vehicles are down 24% on the year, but I'm also 35 years from retirement so aside from reallocating out of stocks (which I don't think is a good idea for my situation) there's not much you can do but watch the slide.

10 year S&P500 returns are now below 0. Amazing.

[bac0n]

There's a lot of fear and anxiety driving the selloff and it's somewhat understandable for the older generations. My 401k and various other vehicles are down 24% on the year, but I'm also 35 years from retirement so aside from reallocating out of stocks (which I don't think is a good idea for my situation) there's not much you can do but watch the slide.

10 year S&P500 returns are now below 0. Amazing.

I hear ya. I am SO glad I have several decades for my portfolio to recover from the lashing it's been taking recently.

[Raiders]

Can we request our money back from AIG? Or have they spent it all on the Four Seasons already?

[D_Davis]

http://img397.imageshack.us/img397/3559/less9000ub9.jpg

[DavidSeven]

Can we request our money back from AIG? Or have they spent it all on the Four Seasons already?

What they've spent on these "recreational" activities accounts for what's probably an insignificant portion of their loan, but as Obama said, these top level execs need to, at the very least, be dismissed. Criminal or civil action against these guys should definitely be looked into as well.

[Russ]

What they've spent on these "recreational" activities accounts for what's probably an insignificant portion of their loan, but as Obama said, these top level execs need to, at the very least, be dismissed. Criminal or civil action against these guys should definitely be looked into as well.
Insignificant to them, perhaps, and insignificant, probably, to the size of the loan. But I don't think I could find any struggling member of the middle class who would characterize that particular $440,000 expenditure as insignificant.

So, I'd agree with you. I thought it was one of the great points Obama made the other night.

[soitgoes...]

I find it fascinating that a country like Iceland, one that before this financial crisis hit I would expect to be almost immune to these types of tough times, would be one of the first true victims. As dire as things are here in the US, Iceland is fucked right now. They have the PM of Britain threatening to sue them over Iceland's refusal to guarantee British savings in that country. They've nationalized their three largest banks, and they are doing everything possible to stave off national bankruptcy.

[DavidSeven]

Insignificant to them, perhaps, and insignificant, probably, to the size of the loan. But I don't think I could find any struggling member of the middle class who would characterize that particular $440,000 expenditure as insignificant.

Oh, for sure. I just meant to say that, mathmatically, it's of little consequence to the loan itself or even to tax payers (assuming they weren't able to pay back the loan). Morally, it's huge gaffe. Punishment for these guys needs to be explored thoroughly.

[Ezee E]

I find it fascinating that a country like Iceland, one that before this financial crisis hit I would expect to be almost immune to these types of tough times, would be one of the first true victims. As dire as things are here in the US, Iceland is fucked right now. They have the PM of Britain threatening to sue them over Iceland's refusal to guarantee British savings in that country. They've nationalized their three largest banks, and they are doing everything possible to stave off national bankruptcy.
wow

[D_Davis]

Punishment for these guys needs to be explored thoroughly.

FPMITAP

[D_Davis]

Take that Canada!

http://www.google.com/search?hl=en&q=canadian+dollar&btnG=Google+Search

1 Canadian dollar = 0.876271 U.S. dollars



USA! USA! USA!

[shaun]

Take that Canada!

http://www.google.com/search?hl=en&q=canadian+dollar&btnG=Google+Search

1 Canadian dollar = 0.876271 U.S. dollars

USA! USA! USA!Econopocalypse or not, all is right with the world. The loonie is once again mockable.

[D_Davis]

Econopocalypse or not, all is right with the world. The loonie is once again mockable.

Yes! We win.

I'm heading to Canada tomorrow to buy my supplies for the end of days.

[Yxklyx]

Take that Canada!

http://www.google.com/search?hl=en&q=canadian+dollar&btnG=Google+Search

1 Canadian dollar = 0.876271 U.S. dollars



USA! USA! USA!

So what explains the dollar's rise? The rest of world is more messed up than the USA?

[Duncan]

So what explains the dollar's rise? The rest of world is more messed up than the USA?

Canada's dollar is almost directly related to the price of oil since we export so much of it (America's largest supplier, more than the entire Middle East minus Saudi Arabia combined). The last year or so oil has been increasing in value and the $Can has been going with it. Now oil is tumbling, so is the $Can.

[shaun]

Rising monetary values is not always a good thing (especially while running a large deficit) and it definitely shouldn't be used as the indicator of a country's economic health. Hold too much value and your exports grind to a halt.

The drop in the loonie or the rise in the dollar doesn't really mean much in terms of overall outlook.

[Benny Profane]

So how soon til the Dow hits zero?

[Yxklyx]

I just did some rough calculations of the DJIA (top 30 US companies).

Between 1980 and 2000 it went from 1,000 to 11,000, which comes out to about 13% a year!

It was about 11,000 in 2000 and got to 14,000 recently - that's somewhere around 3-5%.

It's dropped about 40% in the last few weeks I think.

[Ezee E]

My store's stock has fallen to its lowest since I've worked for them (seven years :( )

I've had stocks that were once $55. Now they're at $18. :(

[DavidSeven]

Warren Buffett Says Now Is the Time to Buy U.S. Stocks (http://www.bloomberg.com/apps/news?pid=20601213&sid=apDKZD4TIAKQ&refer=home)


Writing in the New York Times, he said he's following the principle: be fearful when others are greedy, and greedy when others are fearful.

. . . .

"If you wait for the robins, spring will be over,'' he said.

. . . .

Buffett built Nebraska-based Berkshire over four decades from a failing textile manufacturer into a $180 billion holding company by buying out-of-favor securities and businesses.

[Yxklyx]

Warren Buffett Says Now Is the Time to Buy U.S. Stocks (http://www.bloomberg.com/apps/news?pid=20601213&sid=apDKZD4TIAKQ&refer=home)

I have a hard time believing that he got wealthy from the market by helping other investors.

[DavidSeven]

I have a hard time believing that he got wealthy from the market by helping other investors.

From the article:

"Mutual funds and individuals mimic his stock picks in an effort to duplicate his success, and an academic study in 2007 found that using this strategy for 31 years would have delivered annualized returns of about 25 percent, double the gains of the S&P 500."

EDIT: Also, as long as Buffett makes the first move, it's in his best interest to help as many investors as possible. That would only push his stock values higher. The market isn't some cruel game where only one person can benefit.

[shaun]

Buffett has always preached the fundamentals of buying undervalued stocks and there's a ton of companies are that are now 'undervalued' as far as P/E and Q Ratios are concerned. Whether or not a base change in the market has occurred and those fundamentals still apply is up for debate but I'd certainly take his word over just about anyone else's

I'm definitely not moving money out of stocks at this point and I think even moving more to stocks from bonds is a worthwhile risk.

[Benny Profane]

All in favor of bailing out the big 3 automakers for making shitty, expensive cars?

[Kurious Jorge v3.1]

Just placed an order with Amazon UK and got DVD's that would have been $200 a couple months ago for about 130.

Yeah Dollar!

[Ezee E]

All in favor of bailing out the big 3 automakers for making shitty, expensive cars?
Credit Card Bailout, Housing Bailout, and now a car bailout.

Please, at least one of them has to fail.

[Benny Profane]

These communist acts would make Karl Marx blush.

[shaun]

The precedent has been set I suppose and I'm not for it at all, but $25B to keep GM alive is a far greater boon to keeping our economy going than handing over $140B to AIG.

Our economy sucks but it's going to suck a whole lot more when as a country we produce nothing.

[bac0n]

I think that instead of giving the money to GM, Ford, Chrysler, whoever, the gubmint should instead take that money and use it to create a company that will build cars that people would actually buy. Fuel efficient cars. Hell, fuel-free cars.

[Benny Profane]

I think that instead of giving the money to GM, Ford, Chrysler, whoever, the gubmint should instead take that money and use it to create a company that will build cars that people would actually buy. Fuel efficient cars. Hell, fuel-free cars.

You'll take a Chevy Cavalier or a Dodge Neon and you'll fucking LIKE it mister!

[bac0n]

You'll take a Chevy Cavalier or a Dodge Neon and you'll fucking LIKE it mister!

fuckin' A right, bubba!

[shaun]

Let them file bankruptcy in order to rid themselves of the tens of billions in UAW medical and pension obligations and get back to the business of making cars people will buy.

They'll never be able to compete in a free market with the likes of Honda or Toyota with their union anchor dragging them under.

[Kurosawa Fan]

Let them file bankruptcy in order to rid themselves of the tens of billions in UAW medical and pension obligations and get back to the business of making cars people will buy.

This is a terrible idea. All of those retired people spend money and help the economy. If they all lose their pensions, they'll all stop spending money and look for jobs that are already scarce. I understand that unions have crippled the automakers, but this is not a viable solution.

[shaun]

I don't see a solution that makes the UAW happy and healthy other than government funding of the auto industry which I don't think anyone outside the union, hardcore socialists excluded, really wants.

It's a bad situation all around.

[Benny Profane]

The U.S. auto industry has deeper problems than the unions. They make terrible cars. They are designed poorly, they get terrible mileage, they are ugly and they are unreliable by the standards established by the imports.

They have resisted every innovation, from seat belts to improved mileage, for 40 years. I'm sure there are problems with the union, but the main problems are at the top. This is a dinosaur of a manufacturing industry that needs to be completely revamped.

[Kurosawa Fan]

The U.S. auto industry has deeper problems than the unions. They make terrible cars. They are designed poorly, they get terrible mileage, they are ugly and they are unreliable by the standards established by the imports.

They have resisted every innovation, from seat belts to improved mileage, for 40 years. I'm sure there are problems with the union, but the main problems are at the top. This is a dinosaur of a manufacturing industry that needs to be completely revamped.


Very true. I read an article recently exploring how the international industries strive to come up with new technologies and designs, while the American industries are even content stealing each other's body designs. They just ape each other and mass produce without any decent thought into improving the product. I think something like five American SUV's have the exact same body structure. The article listed about 20 cars that were exactly the same as a competitor. Innovation is apparently an arcane word for the auto industry now.

[shaun]

SUVs were the only thing they were making decent money on. How can they justify changing focus to thin profit margin vehicles and hybrid technologies (which they needed to lease) when they have a huge albatross in the UAW to constantly support? And if they wanted to move plants to right-to-work states like Honda and Toyota did, they couldn't. UAW would strike.

I'm not saying the union is entirely at fault here, it's mostly GM's management, but they need to at least shoulder some of the blame and make concessions.

[bac0n]

I agree. Giving GM money is like giving a kidney transplant to a patient with terminal cancer.

[DavidSeven]

The bright side of a GM collapse would be that I wouldn't have to see any more douchebags in Hummers.

[Sycophant]

The bright side of a GM collapse would be that I wouldn't have to see any more douchebags in Hummers.Do you think we could appease the Gods of Finance by sacrificing all of America's Hummer limos?

It's a long shot, but I think it's worth a try.

[DavidSeven]

Do you think we could appease the Gods of Finance by sacrificing all of America's Hummer limos?

It's a long shot, but I think it's worth a try.

Any society that would willingly accept such an invention probably deserves an economic ass beating.

[Sycophant]

Any society that would willingly accept such an invention probably deserves an economic ass beating.
If I represented the plaintiff in The World v. American Consumer/Financial Culture, I would submit the Hummer limo as Exhibit "A."

[Wryan]

If I represented the plaintiff in The World v. American Consumer/Financial Culture, I would submit the Hummer limo as Exhibit "A."

Just in case that trip to the prom has to go really off-road...

http://www.hummerlimohire.co.uk/images/hummer-limo-images/yellow-8-wheeler-hummer-limo.jpg

[Kurosawa Fan]

Just in case that trip to the prom has to go really off-road...

http://www.hummerlimohire.co.uk/images/hummer-limo-images/yellow-8-wheeler-hummer-limo.jpg

I guarantee that limo company's definition of "cheap" and my definition of "cheap" are two totally different definitions.

[Benny Profane]

So glad that $700B bailout was rushed through. Disaster written all over it. (http://www.cnn.com/2008/POLITICS/11/13/campbell.brown.paulson/index.html)

[Benny Profane]

NYTimes Op-Ed: Mitt Romney on the big 3 automakers (http://www.nytimes.com/2008/11/19/opinion/19romney.html?_r=1&hp)

I really like what he's saying here.

[DavidSeven]

The automaker situation is really a no-win proposition. The current labor agreements and misguided management pretty much ensure that, even with a bailout, the Detriot Three will never compete with foreign competitors. The impossible barriers of entry in the auto market mean that better managed and less restricted new companies won't emerge in their place if they fail. If going bankrupt means they can break away from these restrictive labor agreements then I'm in agreement with Romney. But I'd also replace every single executive decision maker in that company for different reasons. Their design and marketing decisions show that their mindset is stuck in an idea of America that is decades old and expired. If Steve Jobs can convince people to buy a laptop that's twice the price of its competitor then why can't GM compete with an additional $2,000 burden? The problem is that American autos are less reliable and poorly conceptualized, designed, and marketed. You can compensate for one if you have the other, but if you fail on both price and design then your product is obsolete. So, if we're cutting the pensions of all those poor laborers (and compensating for it with our own tax dollars) then the people at the top who don't know how to compete in this market must go first.

[Duncan]

I saw some VP of GM on The Colbert Report a couple weeks ago talking about the Chevy Volt. Honestly, I thought he was trying to convince me not to buy the car. I've never seen a more out of touch executive.

[Benny Profane]

The automaker situation is really a no-win proposition. The current labor agreements and misguided management pretty much ensure that, even with a bailout, the Detriot Three will never compete with foreign competitors. The impossible barriers of entry in the auto market mean that better managed and less restricted new companies won't emerge in their place if they fail. If going bankrupt means they can break away from these restrictive labor agreements then I'm in agreement with Romney. But I'd also replace every single executive decision maker in that company for different reasons. Their design and marketing decisions show that their mindset is stuck in an idea of America that is decades old and expired. If Steve Jobs can convince people to buy a laptop that's twice the price of its competitor then why can't GM compete with an additional $2,000 burden? The problem is that American autos are less reliable and poorly conceptualized, designed, and marketed. You can compensate for one if you have the other, but if you fail on both price and design then your product is obsolete. So, if we're cutting the pensions of all those poor laborers (and compensating for it with our own tax dollars) then the people at the top who don't know how to compete in this market must go first.

He does advocate management, as is, must go.

[Duncan]

U.S. Pledges $7.7 Trillion to Ease Frozen Credit (http://www.bloomberg.com/apps/news?pid=20601109&sid=arEE1iClqDrk&refer=home)

Um, what?

Can someone please explain this article to me? I saw this reported on the news last night on CTV and BNN (both reputable Canadian stations), but I can't make heads or tails of any of it. How the hell can the U.S. goverment pledge half of America's GDP?

[Barty]

Um, what?

Can someone please explain this article to me? I saw this reported on the news last night on CTV and BNN (both reputable Canadian stations), but I can't make heads or tails of any of it. How the hell can the U.S. goverment pledge half of America's GDP?

They will just print more money.

The US is done with. This country will collapse this century.

[shaun]

They don't even need to print it. The Fed can just point at a bank and say "You now have $100B to lend."

It should be noted that the ease of money being thrown around lately has an added benefit of curbing the 1% deflation that occurred in October. Deflation for a market heavily leveraged in credit would be a horrible thing because you end up repaying your debt in dollars that are worth more than the ones you borrowed.

[Barty]

They don't even need to print it. The Fed can just point at a bank and say "You now have $100B to lend."

True, but it still has the same effect.


It should be noted that the ease of money being thrown around lately has an added benefit of curbing the 1% deflation that occurred in October. Deflation for a market heavily leveraged in credit would be a horrible thing because you end up repaying your debt in dollars that are worth more than the ones you borrowed.

Deflation is what is needed right now. It cleans up the market and rewards those who were responsible.

[Wryan]

The US is done with. This country will collapse this century.

With the added benefit of you not being around by the end of this century to see whether you are right. :)

[Barty]

With the added benefit of you not being around by the end of this century to see whether you are right. :)

At the rate were going, it will be sooner rather than later. Hooray. Also, I plan to live forever.

[shaun]

Deflation is what is needed right now. It cleans up the market and rewards those who were responsible.In case you hadn't noticed our huge national debt, deflation would effectively make that number much than it appears. I thought you were a Reagan guy.

[Barty]

In case you hadn't noticed our huge national debt, deflation would effectively make that number much than it appears. I thought you were a Reagan guy.

Yes, I know, that's a good thing. Maybe it will wake up the government and then stop this cycle of debt when the results of our policies are actually allowed to come about.

Of course, spending 7.7 trillion in money we don't have doesn't help our debt either. In fact, it makes it exponentially worse than any deflation could.

And no, I'm a Grover Cleveland kind of guy.

[Duncan]

Seriously though, can someone tell me where that $7.7 trillion figure comes from? Because I don't see how all these bailouts can add up to that much. That's an insane amount of money.


And deflation would be devastating. Last month's drop was largely due to oil prices, but stores are cutting prices across the board.

[Barty]

Seriously though, can someone tell me where that $7.7 trillion figure comes from? Because I don't see how all these bailouts can add up to that much. That's an insane amount of money.

They probably just made it up, like they did with the first bailout.



And deflation would be devastating. Last month's drop was largely due to oil prices, but stores are cutting prices across the board.

Deflation is a response to easy credit and inflation. It's a good thing. It removes the parasites of the economy and rewards those with savings and not those who are debt based. It would actually bring some stability to the economy because it's a market correction.

[Raiders]

I'm a James Garfield kind of guy myself.

[Kurosawa Fan]

I'm a William Henry Harrison kind of fella myself.

[shaun]

Seriously though, can someone tell me where that $7.7 trillion figure comes from? Because I don't see how all these bailouts can add up to that much. That's an insane amount of money.I believe most of the number comes from what the Fed is willing or able to use in order to free up credit markets with short term loans. They do this all the time on a smaller basis (50-100B) but this number is pretty staggering.
I'm a William Henry Harrison kind of fella myself.Kick back. Stay a while.

[Kurosawa Fan]

Kick back. Stay a while.

I would, but funny enough, when I lean back in my chair I get this nagging cough. I'm planning on having it checked out in a couple weeks.

[Raiders]

I would, but funny enough, when I lean back in my chair I get this nagging cough. I'm planning on having it checked out in a couple weeks.

I recommend treatment with castor oil and live snakes.

[Kurosawa Fan]

I recommend treatment with castor oil and live snakes.

I've been breathing in some herbal tea lately, and that's been effective. I'll look into the snakes. Sounds reasonable enough.

[Wryan]

I'll look into the snakes. Sounds reasonable enough.

HMO?

[Kurosawa Fan]

HMO?

Cheaper, and probably more reliable.

[Ivan Drago]

They will just print more money.

The US is done with. This country will collapse this century.

Or...it'll collapse on December 12 (or 21) 2012.

[Sycophant]

Or...it'll collapse on December 12 (or 21) 2012.

Oh, god. Four years from now, we're going to be looking down the barrel of a mass hysteria and general retardedness that'll make Y2K look like a dainty little sneeze, won't we?

I'd like to arrange to be off-planet at the time.

[Raiders]

I'd like to arrange to be off-planet at the time.

Well, if they are correct, at least you'll be alive to forever live in the shame of your disbelief.

[Ezee E]

Couldn't they at least wait until after Christmas?

[shaun]

Good article by Michael Lewis on the mess created by the subprime market.

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom/

[Mara]

I'd never heard of the 12/21/12 thing before, and so I had to google it.

Now my brain hurts and I have whackadoodle sites saved in the history of my work computer.

Plus, I thought the age of Aquarius started back with the hippies? There was a whole song about it.

[Mysterious Dude]

Plus, I thought the age of Aquarius started back with the hippies? There was a whole song about it.
The Age of Aquarius will not start for a few hundred years. We're still in the Age of Pisces, which is epitomized by the prevalence of fish:

http://www.unexplainable.net/brainbox/uploads/1/jesus-fish_01.jpg

http://en.wikipedia.org/wiki/Astrological_age

[Mysterious Dude]

I know this thread is old, but I think it's the right thread for this:

http://wearethe99percent.tumblr.com/

Makes me feel pretty fortunate. My job has very little to do with my degree, but at least it's a job.

[monolith94]

At a job interview yesterday, it was pretty disheartening to have the interviewer look at my resume and give a little grunt after noticing my Masters Degree. And shoot me a, you have a Masters, what are you doing applying for this job? look. We talked a little bit about the toughness of finding positions out there, and he confided in me that he had also had a lawyer (a lawyer!) apply for this $10 per hour position.

[bac0n]

At a job interview yesterday, it was pretty disheartening to have the interviewer look at my resume and give a little grunt after noticing my Masters Degree. And shoot me a, you have a Masters, what are you doing applying for this job? look. We talked a little bit about the toughness of finding positions out there, and he confided in me that he had also had a lawyer (a lawyer!) apply for this $10 per hour position.

I've a good buddy who's a patent attorney, and he's stoked because he starts a new job next week - it'll be his first long term, full time gig in over three years.

[monolith94]

Got called back from that place for a second interview. Yeah!

[MadMan]

Got called back from that place for a second interview. Yeah!Awesome.

And this thread is an unwelcomed flashback to 2008. The only really great thing that happened for me in that year was watching McCain/Palin not getting elected.

[Barty]

One of the dumbest segments I've ever seen.

NtksyMtMylI

[Dead & Messed Up]

In these turbulent times, children will lead us.

http://www.mtlbookstore.com/userfiles/images/Thomas%20Nelson/Heaven%20is%20for%20Real.jpg

[Qrazy]

I believe that belongs in the atheist thread.

[Spinal]

His last name is Burpo?

[MadMan]

Sure that segment on GMA was dumb (and another reason why I don't bother to watch early morning TV), but they're just kids. They're not old enough to know better. Good thing too bad that Barty isn't there to try and brainwash endow them with his wisdom :P