Financial Meltdown (2 Viewers)

[Njja]

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 just flat out believe they are lieing! Has anyone had a problem getting

credit? I listened to a couple of realtors yesterday and they said there is

credit available to people that deserve it.

Congress is like a Bad Magazine Salesman.....the ring the bell ask you to

buy a subscription you say No thanks.

They wait for you to shut the door then ring the bell again and say "How

about now"?

We have said No to the Bailout.

So they put a "Happy Face Sticker" on it and run it through again!

We have a new definition for NO it now means try again tomorrow!

Latest scare........Ohh You Won't Be Able to Cash your Payroll Checks!

I was able to cash mine just fine on Monday, I asked the Head of Payroll

if the check was good!

Wife said it better be, you wrote it.

 

[Gideon]

Why would a company need this to provide payroll checks? Shouldn't they have that money? Or is the fear that the bank doesn't actually have it?

Also, why would be helping wall street when the credit issue is with banks? Why would be helping the "middle men" out and hope that they do the right thing?

Seems the gov't should be working directly and only with banks to address credit and loans and such.

This is a barrel of rotten fish. Gov't want to spend their way out of it to cover their butts.

Who will the eventual recipients be WHEN $700B is spent?

 

[Njja]

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

Gideon:

I believe you are correct.

The housing market filled up with speculators, people with no experience

what so ever were buying houses slapping a coat of paint on them and

doubling the price........and you want me to Bail those Idiots out?

I have a fairly extensive backround in Building Materials, dealing with

Contractors & Commercial Sales People.

Even at the height of the housing boom I stood back because I knew it

wasn't my field of expertise (which would be speling I beleive)

Even now the wife has a book of plans for her "Dream House" when we get

back to Jersey.......I have "The Big Book of Headache Remedies"

 

[Njja]

Why would a company need this to provide payroll checks? Shouldn't they have that money? Or is the fear that the bank doesn't actually have it?

Gideon:

Come on get with the program! Do you mean all the years you ran your

business you actually used money?

See you were one of those guys that actually ran a balance sheet!

What were you thinking?

I guess you should have opened say a $100,000 line of credit....taken a

nice trip to Paris until the money ran out......and now you could have your

hand out looking for a $250,000 Bailout (Got to make a little Profit)

I always believed you hired an employee so you could increase your cash

flow and earn more profit, more of course then you pay them.

If this is the case, and you are running your business properly, should allow

you to have the funds to pay your bills.

Problem Congress has forgotten its not their money, its ours.

 

[Spitfrnd]

Gideon: Come on get with the program! Do you mean all the years you ran your business you actually used money?

See you were one of those guys that actually ran a balance sheet!
What were you thinking?

I guess you should have opened say a $100,000 line of credit....taken a
nice trip to Paris until the money ran out......and now you could have your
hand out looking for a $250,000 Bailout (Got to make a little Profit)
I always believed you hired an employee so you could increase your cash
flow and earn more profit, more of course then you pay them.
If this is the case, and you are running your business properly, should allow you to have the funds to pay your bills.

Problem Congress has forgotten its not their money, its ours.

Congress forgot that about 150 years ago. That said, the comments suggesting that there is no credit crunch are not accurate. The comment by the real estate agent is based on current assumptions which are the ones at risk and also do not represent larger business credit senarios. As I noted, I have seen several A rated companies have to cancel their borrowings for capital improvements lately and no you do not normally fund expansion from reserves. Also the TED spread I noted is a tangible and scary example of how tight things are becoming. If you want to try an economy with no growth, this would be the time. As one economists noted on NPR yesterday, this is not a bailout but an investment in financial infrastructure.

 

[Njja]

As I noted, I have seen several A rated companies have to cancel their borrowings for capital improvements lately and no you do not normally fund expansion from reserves.

Good for them, I would assume a prudent businessman would not choose this

moment to overextend himself.

I am confident that I could walk into any bank I do business with and obtain

a mortgage with no problem. Of course I would not seek to borrow what I do

not have.

One of the companies I hold is in the middle of a 50 Billion dollar deal that is

moving along nicely, my portfolio is down 5% which is a drop in the bucket

in this "Sky is Falling Atmosphere"

I think the problem with most investors nowdays is their lack of personal

involvement. If you are in a mutual fund, or your 401K is allocated to

mutual funds you really don't know how your money is being handled.

The fund manager is in control, one bad move and your return for the year

can be disappointing.

Its your money, if you took the time to earn it, you should take the time to

learn how to invest it properly and be responsible for your own position.

I can only imagine how upsetting it must be to call your broker and find out

you have lost major $$$ he has invested for you.

I know this may sound difficult, but if you enjoy a coke with your lunch why

wouldn't you read about the company and perhaps invest?

If you turn the light switch on and the room lights up......why not check out

your energy company?

Your brand of gas?

Favorite homecenter?

Do you take medication?

Use a Band-Aid?

Are you going to get rich tomorrow? No

Next week? No

Next year? No

10 years from now.......well maybe, its certainly worth a shot!

 

[1879fanatic]

John,
Are you actually endorsing investing in US companies!? Good for you! How about going a little further and limiting (IMNSHO freezing) imports from China until we can sell something in that country. Prices are up anyway, we might as well pay for quality rather than absolute crap. Imagine if the Chinese sold cars in the States
BTW the banks are checking and calling in their LOCs to SB in NJ. That's where the payroll issue comes in... Lower revenue plus debt service equals getting rid of some of my people, or all. Maybe the State of NJ could help me out...Oh, I'm not in an economic empowerment zone plus I'm a #2m Happy, Happy, Joy Joy Mike

 

[Njja]

John,
Are you actually endorsing investing in US companies!? Good for you! How about going a little further and limiting (IMNSHO freezing) imports from China until we can sell something in that country. Prices are up anyway, we might as well pay for quality rather than absolute crap. Imagine if the Chinese sold cars in the States
BTW the banks are checking and calling in their LOCs to SB in NJ. That's where the payroll issue comes in... Lower revenue plus debt service equals getting rid of some of my people, or all. Maybe the State of NJ could help me out...Oh, I'm not in an economic empowerment zone plus I'm a #2m Happy, Happy, Joy Joy Mike

Ha, I agree with putting Americans to work first!

I also believe Wall Street pushes businesses to conform to their ideals of

double didgit growth and increased market share. This often leads to

increased debt with over production often being the result.

I believe more in pay as you go growth.....which makes me a dinosaur.

Our course no one would be buying out my company unless I wanted to sell.

I would never have my name on the door with only 5% of the outstanding

stock under my control!

 

[nmrocks]

The American free enterprise system is the biggest most powerful engine, by far, in the world. It fuels all the prosperity in the world and is far larger and far better equipped to fix this issue. If these politicians had any sense instead of ego, they would remove the chains and turn it loose. this would be a blip on the screen in history books of the future. However if they continue to meddle in the name of themselves and there ego trips, this could end very badly or cause this to strech on intermitably. I want to know the names of every politician that votes for this sack of you know what bill!
Ray

 

[Njja]

The American free enterprise system is the biggest most powerful engine, by far, in the world. It fuels all the prosperity in the world and is far larger and far better equipped to fix this issue. If these politicians had any sense instead of ego, they would remove the chains and turn it loose. this would be a blip on the screen in history books of the future. However if they continue to meddle in the name of themselves and there ego trips, this could end very badly or cause this to strech on intermitably. I want to know the names of every politician that votes for this sack of you know what bill!
Ray

Ray:

I will certainly post where to find the names of the house, and senate voting

roles if this mess is passed!

We will have to hope the voters do the rest!

 

[Gideon]

I just keep thinking that with prices for Chinese goods on the rise we are so perfectly poised to re-tool America and the get the industrial engines started up. Sadly, this $700B will have nothing to do with that - just the hope that it will start that process.

I buy from so many companies who produce excellent prodcuts in China but prices are increasing. These are items I could easily see produced in the US at a competetive prices with comparable detail.

What the govt is doing has nothing to do with actually working on infrastructure, re-tooling and re-igniting manufacturing and, well, you get the point.

 

[1879fanatic]

"What the govt is doing has nothing to do with actually working on infrastructure, re-tooling and re-igniting manufacturing and, well, you get the point"

Gideon,
How right you are! Maybe coddling to union demands, and assisting companies in their quests for survival after getting clobbered with union demands, but no new manufacturing incentives at all. Like I said before, we'll be reduced to a service -only economy(like in most of Florida) and that is bad! I guess the only way to bring jobs back is to force companies to make stuff here, and that will only be done when it is cheaper to do that than going abroad for materiel. Maybe shipping costs rising will light a fire under someone's backside! Mike

 

[Njja]

I don't know but we must use our votes to wake the Government up.

I have spoken to the party I support, and my Senators & Congressman.

I have told them all that I will not vote for anyone voting for this Bill.

So we shall see this evening.

At the very least I will receive fewer emails looking for a handout.

Oh sorry, I meant to say "political support"

 

[Njja]

Well senate added 349 pages to make it even more difficult to read, and

another 150 Billion in expenses so the grand total is $850 Billion.

This is taken directly from pages 28-29:

(b) HOMEOWNER ASSISTANCE BY AGENCIES.—
11 (1) IN GENERAL.—To the extent that the Fed12
eral property manager holds, owns, or controls mort13
gages, mortgage backed securities, and other assets
14 secured by residential real estate, including multi15
family housing, the Federal property manager shall
16 implement a plan that seeks to maximize assistance
17 for homeowners and use its authority to encourage
18 the servicers of the underlying mortgages, and con19
sidering net present value to the taxpayer, to take
20 advantage of the HOPE for Homeowners Program
21 under section 257 of the National Housing Act or
22 other available programs to minimize foreclosures.
23 (2) MODIFICATIONS.—In the case of a residen24
tial mortgage loan, modifications made under para25
graph (1) may include—
29
O:\AYO\AYO08C32.xml S.L.C.
1 (A) reduction in interest rates;
2 (B) reduction of loan principal; and
3 (C) other similar modifications.

Not much point in busting your butt anymore, your just going to be paying

for the guy in the Escalade's Spinny Wheels.

 

[Canadian Samurai]

The American free enterprise system is the biggest most powerful engine, by far, in the world. It fuels all the prosperity in the world and is far larger and far better equipped to fix this issue. If these politicians had any sense instead of ego, they would remove the chains and turn it loose.

Ray, there's actually at least 3 larger sources of prosperity in the modern world:

1) The European Union http://useconomy.about.com/b/2008/02/12/us-no-longer-worlds-largest-economy.htm
2) Mother Nature (which provides the foundation for all of our prosperity through history, but which would be destroyed if we "turned loose" free enterprise as you recommend)
3) Oil (which the human race was extremely lucky to be able to dig up, and which truly does fuel the prosperity of the world)

China is also predicted to become the world's largest economy by 2025.

 

[Toy Soldier Brigade]

I just bought a slightly used inflatable hemorrhoid donut on eBay too deal with the poking and prodding I'm going to get when this thing is passed.

 

[nmrocks]

Cs,
First off I don't think this changes any of my statement?
2nd while the composite size of the conglomeration of the european union may be larger, it is a "loose " configuration at best, without the efficency or the true ability to work as one.
3rd your right about Mother nature, nothing stronger, thats why all mans work is impotent to change the earth's climate.
4th oil's powerful stuff but it's just a commodity, in plentiful supply, artificial shotages for control and profit blah, blah, blah. You know my positions

Think of the american economy as a "host", the american gov't is a symbiote.The combination of the 2 should make things better for both. The host will survive without the symbiote, but the symbiote cannot survive without the Host. The symbiote has put such a drain and made the hosts work against itself (in the form of forcing risky loans under penalty of law) to the point it is crippling the host and yet we look to the symbiote for answers on how to heal the host?
Sorry the answer is to stimulate the host to fix itself and remove the things that made it sick to begin with.

Ray, there's actually at least 3 larger sources of prosperity in the modern world:

1) The European Union http://useconomy.about.com/b/2008/02/12/us-no-longer-worlds-largest-economy.htm
2) Mother Nature (which provides the foundation for all of our prosperity through history, but which would be destroyed if we "turned loose" free enterprise as you recommend)
3) Oil (which the human race was extremely lucky to be able to dig up, and which truly does fuel the prosperity of the world)

China is also predicted to become the world's largest economy by 2025.

 

[Canadian Samurai]

Think of the american economy as a "host", the american gov't is a symbiote.The combination of the 2 should make things better for both. The host will survive without the symbiote, but the symbiote cannot survive without the Host. The symbiote has put such a drain and made the hosts work against itself (in the form of forcing risky loans under penalty of law) to the point it is crippling the host and yet we look to the symbiote for answers on how to heal the host?
Sorry the answer is to stimulate the host to fix itself and remove the things that made it sick to begin with.

That's a very cool analogy, seriously.

I like it so much in fact, that pardon while I borrow it to describe the relationship, as I see it, between nature and the economy: Think of the earth's environment as a "host", and human beings are a symbiote.The combination of the 2 should make things better for both. The host will survive without the symbiote, but the symbiote cannot survive without the Host. The symbiote has put such a drain and made the hosts work against itself (in the form of species loss, pollution and climate change) to the point it is crippling the host and yet we look to the symbiote for answers on how to heal the host? Sorry the answer is to stimulate the host to fix itself and remove the things that made it sick to begin with.

What does this have to do with the financial crisis you ask? Well just the fact that I don't think we can "unleash the beast" of the world's industrial economy and expect that everything will magically get better for our grandchildren. In fact, things would likely get much worse. Because, there are other key priorities to having a good life besides consuming even more useless stuff (like for example being able to breathe clean air). Let's also remember, that no matter how much of a recession the US and the West goes into, that the average American (and Canadian, and European etc.) will continue to enjoy a material lifestyle far superior to 2/3rds of the rest of humanity, not to mention any human being that has ever come before us. THAT I think should be cause for continued optimism and happiness among all of us, if not a little concern I suppose about the responsibilities that entails.

 

[Louis Badolato]

I've tried to avoid getting involved in this discussion, as, frankly, I don't know the first thing about the economy, but I have very much enjoyed reading it.

The one thing that seems to be an overarching truth regarding human nature is that we are relatively short sighted, rarely being able to see past a year or two, much less a generation or a lifetime. I think the real problem with the idea of the free market fixing everything is that the free market is about profit, measured in quarters or at most a single year. No matter how intelligent the CEO, I suspect that his or her efforts will be focused on quarterly or yearly profit margins, not on benefiting mankind or the planet over generations.

The same goes for politicians. The rarely look beyond their term of office, and usually focus on what will get them re-elected, a short term goal. I doubt that either government or business will solve the economic and environmental problems we now face.

 

[nmrocks]

My work is service and sales of banking equipment, yesterday I had lunch with a VP at one of the local credit unions. The conversation came around to the economy and the bailout. He mentioned to me that deposit in the last couple of months have skyrocketed like nothing they have seen before, up nearly 30%!
What people don't seem to realize is when the stock market loses a trillion dollars on a day when the market falls 800 points the money doesn't just vanish! someone has sold stock and taken there money else where. Obviously many are looking to the safety of the banks, low gain but whats important is low risk.
The hidden story I'm trying to point out is say 1/2 of that trillion dollars pulled out on a bad day goes into the bank, 500 billion dollars in liquidity occurs in one day!
I still don't see the need for the bailout and no one has shown me any real reason except" The Sky is Falling, The Sky is Falling"!
Ray