Financial Meltdown (8 Viewers)

[Rutledge]

This entire topic may be far away from "toy soldiers" but it has lots of relevance. There is no way the entire world, including the toy soldier world, will not be affected by what is going on -- from main street to wall street, to all around the world.

Assuming a continued deflationary spiral in real assets, toy soldier nominal prices may actually decline. Their relative cost may actually increase however. Discretionary spending in the US will shrivel to a trickle. Hobbies like these will see, at least temporarily, demand destruction. Toy soliders who outsource their manufactring may have built in production flexilibity, but their overall business will still decline. I predict we will see fewer newer releases down the road, and smaller production runs.

Not to sound like Negative Nancy, but this is history making stuff we are experiencing. Maybe one day they will be making metal miniatures of the folks who got us out of this terrible situation!

 

[Lewey Gun Vick]

Hopefully they are getting beat up by my soldiers! Not to be violent! what we have got to do is keep investing that is one of the ways to solve this not pull out of it, but to keep on the course even when the road is tough!

Vick

 

[Njja]

Your post leaves me confused

First off many Banks were pressured into these SPM's by Government Agencies so Corporate Greed was not the only cause.

Secondly I don't have a problem with a reasonable plan to restore confidence
in the market, helping peoples investments.

Third, weak poorly run companies should fall by the wayside....replaced by solid companies that can grow the economy.

Finally we should under no circumstances reward people in default on any
loans be they Home, Credit Card or Car. We have laws in place to deal with these problems. To reward these people with a Free Home, Car, or Written off
debt will only encourage this behavior in the future.

Why go to work?

 

[nmrocks]

I really like the idea of abolishing the Capital Gains tax, even if it's only temporary. Can you imagine the amount of money that would be pumped into the system if people didn't have to pay that tax and people were free to spend there gains without penalty? The bailout would not even be needed and I venture to guess there would be such a boon that the cofers would fill faster than the taxes they would loose.

 

[Njja]

Capital Gains has already been reduced (long term) and actually both

candidates plans include futher reductions.

Of course neither candidate planned on our current financial situation,

which will cause major changes in their planned programs.

After reading both candidates economic plans I believe both would benefit

our country....now we just need a reasonable solution to stabilize the

market.

 

[bromhead]

My dream would be to have Col Kurtz,,"the hollow men" at the top ,that make all the rules ,destroy the institutions,bail out with their millions and have the govt take over..Never appearing in public. Have them testify with the hand raised about their bank accounts,,what country is it in,,full of Euros,swiss francs etc?
A lot like the cocaine wars I lived thru in miami ,the corruption capital of north america,,in the late 70s ,80s. the street dealers thrown on the ground, rousted like in "cops". the mid level types killing each other and themselves daily, the bankers that laundered all the billions in drug money silently led away out the back door with a coat over the handcuffs. Any one remember "Kenny boy Lay" of enron.

 

[Njja]

My head is spinning, and I read to much.

Yesterday we defeated the Bailout Bill.........so

1. They are going to bring up another one.

2. Yesterday acording to The New York Times Treasury Sec Paulson
provided $150 Billion for Banks plus an additional
$330 Billion through Swap lines with Foreign Banks.

This is more money then the bill would have provided! It was releasing
$250 Billion with another $450 Billion available later.

Treasury has less then $300 Billion in reserves now with plans to borrow
1 or 2 Trillion as needed.

Here is my question:

Why bother to vote on something that once defeated will simply be brought
up again and again and again until it is passed?

Why bother to ask the tax payers for a bailout when you are just going to do what you want anyway?

The country is going to be ruined and in such a hole the next President will
not be able to do anything but attempt to service the debt.

Why is no one telling this to the American Public?

What a Mess!

Does anyone really believe a Business run properly has to Borrow Money to
Meet Payroll?

They are spinning "Lines of Credit" which is a tool used by Fluid Businesses.

 

[Spitfrnd]

....Does anyone really believe a Business run properly has to Borrow Money to
Meet Payroll?
They are spinning "Lines of Credit" which is a tool used by Fluid Businesses.

Yes, businesses frequently borrow short term to meet cash flow requirements. There are well established guidelines for evaluating that kind of credit and it has nothing to do with subprime lending.
I have no idea what you mean by spinning lines of credit or fluid businesses. Revolving lines of credit are common practice.

 

[jazzeum]

Revolving lines of credit are common practice.

Most major corporations have standby credit facilities with banks. Sometimes, you need to resort to it, such as in the case of a major expansion.

 

[Njja]

Yes, businesses frequently borrow short term to meet cash flow requirements. There are well established guidelines for evaluating that kind of credit and it has nothing to do with subprime lending.
I have no idea what you mean by spinning lines of credit or fluid businesses. Revolving lines of credit are common practice.

I was referring to the Media "Spinning" normal business practice of using

Lines of Credit to meet daily expenses.

It has as you stated nothing to due with the SPM lending.

The Media is telling the public that people are not going to get paid because

businesses can't borrow money which is simply not the case.

Are you not concerned with the $480 Billion Paulson spent yesterday after

the bill failed?

I would think that would be more important to you then an explination of

(spinning lines of credit or fluid businesses).

 

[Spitfrnd]

I was referring to the Media "Spinning" normal business practice of using Lines of Credit to meet daily expenses.

It has as you stated nothing to due with the SPM lending. The Media is telling the public that people are not going to get paid because
businesses can't borrow money which is simply not the case.

Are you not concerned with the $480 Billion Paulson spent yesterday after
the bill failed?
...

Well businesses need credit of different types for different purposes and the credit market is VERY thin and fragile right now. That is the issue, not meeting payroll per se in the short term. It is hard to get a straight answer on whether this will fix itself and if so how long that will take but I can tell you from personal experience that there are legitimate A and above rated companies in that are having to defer their various credit needs and hence spending and it won't take long for that to result in more contract cancellations and more lost jobs. That is really the current crisis, not whether any particular bank fails or not. Maybe we need a recession, maybe not but it looks like we will shortly have a dozzey if something in the credit markets does not change. People who think the world can run without debt need to start looking for their new cave.

As to the $480 billion, I haven't seen the details but I suspect it was a only short term credit and not really spent as it were. I do worry about what our government does really spend however and I am no bigger fan of giving free homes than you are.

In honor of this mess, I watched The Distinguished Gentleman last again last night, which is pretty close to my view of our Congress.

 

[Njja]

I really don't mind funds being lent with interest to banks or the financial

marketplace.

I believe the American Taxpayers have a right to know the Sub Prime

Mortgages were the root of this problem.

I do not believe anyone in default on their Mortgage should have the

principal (amount borrowed) reduced or forgiven with my tax dollars!

I believe the American Taxpayers have a right to know what is going on as

they are footing the bill for everything.

When the Media Brings up Lines-of Credit and other Business Tools they are

simply masking the true facts from the public.

Which in my opinion is unacceptible.

 

[Spitfrnd]

I believe the American Taxpayers have a right to know the Sub Prime Mortgages were the root of this problem.

I do not believe anyone in default on their Mortgage should have the
principal (amount borrowed) reduced or forgiven with my tax dollars!

I believe the American Taxpayers have a right to know what is going on as
they are footing the bill for everything.

When the Media Brings up Lines-of Credit and other Business Tools they are simply masking the true facts from the public. Which in my opinion is unacceptable.

Well I think almost everyone knows the first point. Most of us common folk agree with you on the second and third but the fact is that the donkeys have their hands out for the poor borrowers who had no reason to expect they could not afford their homes and many elephants have close fights in blue collar districts where they also think this will play. While I am no fan of the press, I would suspect incompetence before malevolence on the accuracy of the coverage. In all fairness though, we are in hardly charted waters right now. Now if there were a liberal administration I would wonder but heavens knows the media hate JW.

As an aside, one quick, dirty look at credit crunch is reflected by the interbank lending market. The TED spread--the difference between the three-month Treasury bill and the three-month LIBOR--is an indicator of credit risk; US T-bills are considered risk free, while the LIBOR reflects the risk of lending to commercial banks. The TED is currently near an historically high 350 basis points (3.5%). It typically flucuates between 100 and 200. To say this spread is unheard of is a big understatement.

 

[nmrocks]

Regardless of all the whow is me, I'm still unclear how doing nothing would change anything? I still not convinced we couldn't change codes and regulation, repeal the capitol gains tax completely and let the free enterprise system do the rest. I don't like being on the hook for all the bad mortgages and whatever else you know they'll pack into this and have gov't deep inside private industry. As I said before, if you don't think these guys will run ripshawd over these dunbass politicans, you haven't been watching the last 200 years!
Ray

 

[Toy Soldier Brigade]

I really don't mind funds being lent with interest to banks or the financial

marketplace.

I believe the American Taxpayers have a right to know the Sub Prime

Mortgages were the root of this problem.

I do not believe anyone in default on their Mortgage should have the

principal (amount borrowed) reduced or forgiven with my tax dollars!

I believe the American Taxpayers have a right to know what is going on as

they are footing the bill for everything.

When the Media Brings up Lines-of Credit and other Business Tools they are

simply masking the true facts from the public.

Which in my opinion is unacceptible.

I could not agree more. I have no sympathy for someone losing their house because they borrowed more than they could afford or payback. I pay my financial obligations and should not be bailing out the irresponsible. On the other hand I am in the market for a new house, and hope to take advantage of someone's bad situation. It's just survival of the fittest

 

[Njja]

Spitfrnd:

The entire situation is a real shame. I believe a Bill will be forced through

on top of yesterdays spending.

Then end result will be the next President will spend his new term trying to

service this new debt, and all the promises of various programs will all have

to be scraped.

If I didn't have a brand new Grandaughter I would move to Switzerland!

 

[Njja]

Regardless of all the whow is me, I'm still unclear how doing nothing would change anything? I still not convinced we couldn't change codes and regulation, repeal the capitol gains tax completely and let the free enterprise system do the rest. I don't like being on the hook for all the bad mortgages and whatever else you know they'll pack into this and have gov't deep inside private industry. As I said before, if you don't think these guys will run ripshawd over these dunbass politicans, you haven't been watching the last 200 years!
Ray

Ray I'm inclined to agree with you. Market lost 785 yesterday as Mutual Funds and Banks sold positions to raise capitol. It went up 485 today as investors snapped up the blue chip bargins. We might be in a Bear market for awhile but we Market is still sitting over 10,000.

The Government now is going to be 11 Trillion in Debt (6 Trillion though is owed to itself.....Social Security Trust Fund) which scares me because in an emergency (which could be anytime with these idiots) they could scrap it and with the stroke of a pen write off 1/2 our debt......and Social Security.

Of course they would immediately borrow another 6 Trillion and provide all the folks in Foreclosure with a Beach House & an Apartment in NYC.

So I really don't see any tax reduction in our future.

If we don't watch out your going to have to take taxes out of your childrens allowance & send it to Uncle Sam.

 

[Njja]

I could not agree more. I have no sympathy for someone losing their house because they borrowed more than they could afford or payback. I pay my financial obligations and should not be bailing out the irresponsible. On the other hand I am in the market for a new house, and hope to take advantage of someone's bad situation. It's just survival of the fittest

Its really what America is all about, its your story! You work, pay your bills and save your money.

You didn't buy a house you couldn't afford......you maintained your credit ratings and now you are ready to buy a New house!

You certainly won't buy something you know you can't pay for.......because you don't want to ruin your good name and lose it!

Through incompetence we have homes in foreclosure all over the country which are bringing down the values of other homes in their neighborhood.

If we rescue these idiots today......they will need rescue again tomorrow!

If we leave the situation alone, perhaps You will get a good buy on a Home which you deserve!

Why do you deserve it?

Because you earned it, no one gave it to you!

I hope you find a nice home, and get a good buy!

 

[Gideon]

I don't see how repealing the cap gains taxes will help at all. If the ship is sinking, then the money will be pulled out and reinvested elsewhere - outside of the dollars reach. That is just another bailout of sorts.

I have no idea what to do about loosenng the credit markets but who is to say that a $700B bailout or "rescue" would ease that up? It doesn't make any sense.

I think the average American citizen, like us, has spent the past week bracing themselves to find out where the buck stops. What is our value and lets just get on with it and deal with it. This crash is coming with or without an injection of newly printed money risking terrible inflation. Might as well start heating your home with American cash and save the firewood and furniture for later.

 

[Gideon]

On the other hand I am in the market for a new house, and hope to take advantage of someone's bad situation. It's just survival of the fittest

And, you know what? You'd probably be paying closer to the actual value of the home than you would have 16 months ago.

That's the crux of what I am seeing here - America needs to bulldoze past the speculators and snakeoil salesmen and find out for ourselves what our real value is all around the economic picture.

Politicians can no longer say "America is strong and prosperous" - they can't feed us that line anymore.

I really don't think our economic picture is as bad as it all seems right now. I honestly don't. I know that the economy always gets pessimistic during an election cycle and all these issues get pulled to the forefront.

Another thing I think is happening is that are a lot of scare tactics being used to mask a normal part of our economic cycle. There is great potential for covering tracks and diverting attention away from stupid decisions made by our "leaders" and a potential power and profit grab being allocated to the wrong places.

But, defer to the experts here to tell me otherwise. I really love this thread. I have learned more here than I have listening to any other source and I really want to thank you all for providing your feedback in such a non-confrontational as possible way.