Does anyone really realize how f'ing scary it is now?

Discussion in 'Politics' started by faceking, Sep 30, 2008.

  1. faceking

    faceking Well-Known Member

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    This is beyond "under Bush's watch" and "Carter's CRA, re-inforced by Clinton" and "who's really in bed with Fannie and Freddie" (although that makes for a great LPSG Fictitious Stories thread, given all the non 100%s here) and "Pelosi" and so on.

    On a side note, the candidates are dead silent on tactics on this one kids. I kinda don't blame them. They are speaking at 30,000 foot levels now because they both don't want to get pinned to any tactic that is over-their-heads and make them look silly if the short-term tack goes in a different direction or when/if the economy tanks. Obama has never heard of a credit derivative swap, and McCain heard one at a cocktail party. Funny that there are polls on who would handle the crisis better. These two are getting speaking points, and the Cliffs Notes on the global banking system... don't fool yourselves.

    Anyways, this is about the entire banking system. Banks depend on each other for credit/debt, always have always will. This isn't about home loans, and "how about we give each person a share of the $700B". Enough of the amateur hour. Seriously.

    One sliver, and although one of the biggest, of this .....is $58T (trillion) in market exposure alone. The bailout is one of the last dry matchsticks left in the box. It will happen, take it to the bank. This isnt' bailing out AIG, it's bailing out their customers. Just as you and I have FDIC, this an ad-hoc institutional version that needs to go into effect ASAP.

    If banks, due of joint default and a few nick-nacks, dry up. Who is going to unwind all of these swaps. Fuck your ability for home loans, and making housing affordable for low-income, minorities. Where is corporate America going to find credit for the ... for example, General Electric and the circa $20-40billion a day they used to fund operations at LIBOR -8?????????????????? The auto-makers and so-on? Foreign investment and so on and so on?


    Does anyone on this board even know shit or shinola about this?

    This is seriously like Bay of Pigs shit... with a number of ppl with peace signs, and a number of ppl saying to push the button.
     
  2. Phil Ayesho

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    You tool.

    the problem was NOT in Fannie and Freddie... it was in the triple A bond rating given to these ridiculous loan packages.
    Those packages did not originate in Fannie and Freddie. Fannie and Freddie BOUGHT them, based upon the triple A rating.
    They also sold them to other nations based on a bogus triple A rating.


    10 years of republican rule.
    YOU CAN NOT ESCAPE RESPONSIBILITY.
     
  3. B_New End

    B_New End New Member

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    We are going into a recession.

    We don't need banks to loan out our $700 Billion. Our government could do it better, with lesser paid, and better regulated staff.

    How scary is it? yeah... well... all I got to say is, Ron Paul. We already knew how scary it was... and we know that trying to erase debt with more debt is a BIG mistake.
     
  4. D_Monkee Knutz

    D_Monkee Knutz New Member

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    I agree with Face king. The problem is most Americans use credit without bothering to think about where it comes from. Take an economics course and pay attention this time. We can enjoy the life we have because of the ability to get credit. Yes we can live with out it and get by but, do you really want to revert to a cash society? Think about it, did you pay cash for your house or your car? I did but I am an exception but I would wager most of you did not and could not if you had to. I agree no financial institution or those who ran them should profit from this but but given that most corporations (walmart hospitals, banks, supermarkets auto dealerships) run on credit, think of what the price would be if supply dried up and these places could only sell what they were able to purchase with cash.

    In short AIG ( a company I personally hate) needed to be financially backed up because they insured the mortgage securities. Think of this way, you have fire insurance. your house burns down your insurance company pays for your one house. what happen if everyones house burns down at the same time? your insurance company will run out of cash to pay for everyone since the amount you pay in premiums is a lot less ( i know it does not seem that way) than what the insurance company could potentially pay out. Well kids everyone's house is on fire at the same time. I know what are the odds? Those of us who have no credit debt and enough cash in the bank afford paying in cash will be fine the rest of you. Well, ever hear of the depression?
     
    #4 D_Monkee Knutz, Sep 30, 2008
    Last edited: Sep 30, 2008
  5. transformer_99

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    I'd be more apt to support a bailout if I knew that there would be a more equitable distribution of income and that others wouldn't continue lavish & extravagant lifestyles at the expense of the majority of us. I'd like to see prices adjusted for incomes so that the quality of life for all would improve. That's what you throw $ 700 billion at, not the status quo or hope that the economy improves. $ 700 billion is a shitload of money and I'll bet those already on the gravy train will burn thru that in short order and line back up at the Congressional trough for another healthy dose of it.
     
  6. Notaguru2

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    I say no bailout. Then start recall campaigns for those sorry asses on capital hill.
     
  7. lokiau

    lokiau New Member

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    Bail out no bail out America is going to be fucked either way. It is about time too, America consumes to much and produces to little there was alway that under lying floor in the economy.

    This crash will eventually lead to a more level playing field on the world economy which is a good thing; maybe not for America but they have had a good ride.
     
  8. Phil Ayesho

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    That is exactly what the folks thought in 1929-
    and they were fine- Until the Banks collapsed in 31.

    Here's a clue for you... the way insurance companies are strucured? SAME as a bank.

    They entirely rely on the fact that EVERYBODY won't need to take out their money at once, cause THEY ain't got it.

    Money you put in the bank is lent out at interest.

    If the folks they lent it to can't pay- and all you depositors come to get your money... guess what happens"

    You get to stand in a line 20 million people long and try to explain to the Federal government that you have money INSURED by FDIC.


    Good fucking luck with that "i'll be fione" idea..

    And , on a side note, I am SICK of self absorbed people who only seem to care about THEIR shit.

    That's the thinking that ogt us here-- voting for a guy who says he's going to war AND lowering your taxes...
    That half of America was stupid enough to fall for that is telling.






    Here's the facts- Either the governement puts up a big infusion oF CAPITAL... or we have a depression...
    And GUESS WHAT IT TOOK TO END THE DEPRESSION IN 1940?


    A large infusion of borrowed money from the government to start up war production.

    SO
    imbeciles agasint a bailout, pick your poison... pay NOW... or pay MORE after a decade or two of suffering and poverty.
     
  9. B_Nick4444

    B_Nick4444 New Member

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    as someone in the industry, I would say, I'm very concerned
     
  10. transformer_99

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    Just watched ABC Nightline rebroadcast/air a program on the mortgage crisis. They interviewed a man in California that bought a $ 1.3 million dollar home. Shortly after the prices started dropping out from under him. Anyway, he simply stated what his strategy was. Buy the home, live in it for 1-3 years and sell it for a million in profit and use the million to fund his retirement. The ABC Nightline story is on McMansions. This is the primary reason I'm against the bailout, that man's story, his plan to profit to the tune of a million dollars in as little as 3 years. What a retard, he deserves foreclosure for his greed. What is his malfunction ? Where does he think anyone would get a million more than what he paid for it to buy a stamped out, cookie cutter mansion ? Here's but a few of the stories in the on-line version:

    ABC News: Latest Victim of the Housing Market: McMansions

    Retards, all of them and they don't deserve a bailout nor do the institutions that were stupid enough to qualify them for this fantasy of trying to fleece the rest of us for that Donald Trump lifestyle. Funny, the railing on those who don't support the bailout are portrayed as uneducated. The first couple in the story, the idiot husband is a restauranteer (I'll bet he has no problem pricing & trying to sell a $ 15-20 plate of spaghetti to anyone that is unfortunate to wander into his eatery) and his equally stupid wife is a doctor. Apparently malpractice insurance isn't as bad as doctors claim it to be, they can have a $ 1.3 million mansion. But the point is, this is an entire community of upscale and educated people that bought these homes, this isn't affordable housing and the poor causing this.
     
    #10 transformer_99, Oct 1, 2008
    Last edited: Oct 1, 2008
  11. Mr Ed in Mass

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    I'm with TF99
     
  12. B_New End

    B_New End New Member

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    1. You keep repeating this, yet a cash infusion into banks and hedge funds IS NOT what ended the depression. How many times before you address the point that I made, that it was the new deal, which was a cash infusion into infrastructure. Cash infusions into banks have never solved the problem. That's how Germany tried it.

    2. Dont call me an imbecile. I have read hundreds of articles on this, and there are plenty of experts that say this will not help, or may even make things worse. There is no proof, that no bail out will make things worse in the long run. But economic history has shown us 100% of the time, the more money pumped into a system, the higher inflation will rise. So you have speculation, I have a guarantee.

    Two articles I'd like you to cmment on

    Commentary: Bankruptcy, not bailout, is the right answer - CNN.com

    and

    Let Risk-Taking Financial Institutions Fail - TIME


    ...are these guys imbeciles too?
     
    #12 B_New End, Oct 1, 2008
    Last edited: Oct 1, 2008
  13. B_New End

    B_New End New Member

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    Yes, Dick Armey's angryrenter.com was set up because of this. The democrats wanted to bail these people out. Many of them were acting like their houses were investments, not places to live. And there has been a terrible mantra that "real estate prices only go up".

    I have been told that, by people who were buying a house, as to why they were paying so much. All us "bubble sitters" knew better.

    Now look, they want to keep the prices of houses artificially high. I refuse to buy an overpriced house. It is very unfair to take my money, or devalue my real, nonborrowed dollars, to try and keep houses out of my affordable price range.
     
  14. curious n str8

    curious n str8 New Member

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    This is what I have been saying all along, just how bad this really is. What we have to do is prove to our creditors that we have the creativity to get ourselves out of this mess. That takes leadership,intelligence,perseverance and the willingness to take the hard road. It means No new health-care, welfare,social programs. We need to concentrate on getting off of foreign oil and start building our alternative energy resources. Such as Nuclular power plants, Geothermal plants, wind farms,our electrical grids etc. Balance out our trade tariffs. Get our research going and be able to sell new solutions. In the mean time bring back other industries to the US. But keeping our environment safe,yet have no restrictions in building our energy plants. Drilling and pumping oil where we know it is at. It's not going to be easy but that's just the way it needs to be done. Either that or go to war or scrap the worlds economy. :feedback:
     
  15. B_New End

    B_New End New Member

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    Agreed.

    We have to show we can stop our overconsumption of the worlds oil, and we need to start rebuilding our manufacturing base at home.

    And most of us going into red faced tirades against this bailout are doing so because we were asking for the brakes to be put on our unsustainable debt economy for years.
     
  16. Skull Mason

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  17. transformer_99

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    New End, enjoyed that angryrenter.com website.
     
  18. rawbone8

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    The modern North American economy has lost its way. I'm no economist but I think common sense is missing.

    Investor speculation doesn't create anything of new value, except profits for those few who time it right and bail before a market correction.


    The services sector serves many, but again, doesn't create anything of new value. Their expertise is in building confidence and exploiting fear — convincing others that their service will make money for the client, or protect the client from damage. Here we have accountants, lawyers, insurance companies, advertising, financial advisers, unions etc. Many of these service each other and the whole incestuous lot fill the majority of prime office towers across the world — creating nothing of new value. Moving the concentration of wealth around is their raison d'etre. The size of this sector seems out of balance to the economy, given that it does not create much of real value.

    Within services, the investment banks sector went from being private firms where the partners risked their own incredible wealth to make things happen, and it changed in the past 40 years to publicly traded "star" firms where all of the risks were taken with other people's money. The scale multiplied and great wealth was accumulated by the successful companies and investors. But as we have seen, they had a fatal fragility that as soon as investor confidence turned radically, they disintegrated almost instantly. Poof. There was no truth in the myth that they were too big to fail.


    Real Value

    Commodities like natural resources, mining, manufacturing, construction, science, energy creation, farming actually create and increase value. Distribution adds value to things because it can deliver goods to markets.

    It has become unfashionable to aspire to humble things like making widgets. This sector been largely exported to cheap labour locations in other countries or continents. Not much of the high end manufacturing survives here either. Our bread and butter is having a decent manufacturing and tech sectors that makes highly attractive goods. The attraction to avoid North American labour unions and find the lower common denominator pools of cheap labour has sparked massive expansion of educated middle classes in Asia and increasingly other continents.

    Competition for the carbon fuels that drive this global manufacturing revolution and the new lifestyles that the new emerging middle classes abroad demand (cars) has driven up the cost of carbon fuels. North Americans could be self sufficient with some radical improvement on cutting waste. California is a good example of where energy savings due to legislated standards in construction and in industry resulted in efficiency and significant savings. Imagine retooling across North America to conserve fuel on a scale that California has achieved. It could be the equivalent of finding new vast new fuel sources through exploration, but will affect the market much sooner — within 5 years rather than 15.

    Fix the financial markets. We need them badly. But we don't need services and excessive speculation to concentrate wealth disproportionately, and that don't create much new value. The value of the investment markets lies in the ability to use that capital to empower borrowers to build successful companies that create real value.

    Capital can be raised (even if on a smaller scale) if Americans were encouraged to increase their savings. Banks should be a place where the average person feels like it's worthwhile to park some savings. Interest rates have to go up. How long has it been since banks offered a return on an account that was worthwhile? Service fees have to be cut drastically. I remember 30 years ago the fees were a tiny fraction of today's bloated fees. The policy has to have incentives that direct people back to systems that used to work.
     
    #18 rawbone8, Oct 1, 2008
    Last edited: Oct 1, 2008
  19. Nrets

    Nrets Member

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    You know, I usually try to avoid these conversations nowadays, cause someone always tells me I don't know what I am talking about...because I always take some leftfield position that either no one understands or everyone is completely offended by. But I want to respond to this. Faceking, you are talking reality when you describe this bailout as the last dry match in a book of matches.

    This is something I have been alluding to for a long time.

    Eventually the economy is going to get so jacked up that there isn't going to be a fucking thing anyone can do about it.

    That is what happens when your country takes out a perpetual line of credit and keeps increasing it by millions of dollars a day.

    What the hell is our national debt now?

    Our money has been meaningless for a long time. They are just government credit slips as long as the country is in debt.

    It wasn't a big deal until the economy started to slow down because as long as the economy was strong it was known that eventually the banks, the government and everyone else would have their money.

    But now people who deal in big bucks aren't paying or getting paid.

    And the government, which basically has a 10 trillion dollar credit card bill wants to borrow 700 billion to add liquidity to the market as an investment so they will eventually get paid.
    They owe a lot, and it is bog business that keeps the government operational. Big business pays taxes and provides jobs and even most of our social services. SAVE BIG BUSINESS BY GIVING THEM 700 BILLION

    This is all fine and dandy until you analyze it for what it is. The government which is 10 trillion in debt wants to give one of its customers...big business...almost a trillion to give them confidence to continue doing business. This is akin to a bank giving someone who is one million in debt a hundred thousand dollar loan to go invest because the bank is confident that that person is going to make that money back. It is akin to that bank assuming that the reason this person was a million in debt was not because of economic missteps and irresponsibility...but because they didn't have enough assests to confidently invest and make money. So here YA GO Here is another hundred thousand. Go invest. We KNOW we will see that money again. WITH INTEREST!!!!

    That would never happen...the bank knows damn well they may never see that money again.

    The government...because it is the United States...thinks it can play God.

    There is no guarantee that the added liquidity is going to do anything.


    What happens when the rest of the world sees the true weakness of the dollar and starts to cashout..

    Who is gonna be the last one out the door?

    China?

    And you know what...this is not the fault of any one political party.

    This is the fault of the greed of the American people and Western civilization as a whole.

    What has happened in America is the free market's constant need for growth to operate smoothly has created this cancerous expansion of credit to deal with the fact that growth comes to a halt when industry is tired.

    And after every expansion more people take advantage of the system to make as much cash as possible. So on every level people are exploiting credit to their advantage.

    When growth slows, and peopel or business bitch, the government and banks work together to create lower interest rates and give out loans as incentives to do business. People throw away perfectly good cars because it is cheap to finance new ones.

    Then when everyone is buying cars (and everything else)...they raise interest...cause the economy is healthy...why not make some extra...CEOS and politicians pocket the money.

    Everyone keeps buying new things because it is the popular thing to do...and now that we all work in cubicles...what better way to spend time than to purchase stuff?

    Credit may have been ok to begin with...but it is been used for a long time to create growth when there is no place for grow

    This scam has gotten so big that the United States government now has a seemingly unlimited credit line even though it has a 10 trillion dollar credit card bill. And it is because everytime someone says "pay up" The U.S. fiddles with the system to make peopel buy more and not have to pay.

    This is like the sad Uncle who gets by with 12 credit cards...paying one off with the other.

    You know what happens eventually...

    What happens if America goes bankrupt?

    Complete and utter chaos.

    Is this going to happen soon?

    Damned if I know.

    But just in case...
    See you all on the battlefield.
     
    #19 Nrets, Oct 1, 2008
    Last edited: Oct 1, 2008
  20. Nrets

    Nrets Member

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    This sums up one of my main points...only I was trying to add that things of real value exist less and less...Which is why credit debts may never get paid...by government, corporations or private citizens.
     
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