Sami

If that bailout doesn't pass to bring liquidity back to the credit markets...

We're going back to stone age folks.

Now I am not a fan of the tax payer footing the bill.. although I completely disagree with it being called a "bailout" as its an investment the fed is making on the tax payers behalf... but regardless...the alternative is absolute catastrophe.

If the bill doesn't pass this weekend....

all hell is going to break loose next week and the consequences for the economy in the long run is 1000s of companies going belly up as the debt markets will be completely illiquid. Ted spreads will be bigger than we've ever seen... just brutal!

I for one am sh!t scared at the moment!

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Boogie

The stone age?

How so?

Let me get this straight. The only way to save America is to save guys that are making in excess of $1m per year? It is the tax payers responsibility to save these asshats? Fuck them!!!

Scared? We all are. However, being scared is no reason to jump off the bridge. These assholes created the mess, why should tax payers pay for this?

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jay23

American business runs on credit (its not a bad thing lookup working capital / commercial paper / line of credit etc).

For example I have a line of credit , i use this money to pay the people who work for me and then pay the bank when i get paid by the clients, I am small so if the bank stops my LC its not a big issue as i can cover with my savings but think about large companies which has to role 50,100 million or even billions of dollers every month.

A very good read is on NPR web site at thats talks about how the issues with credit market affects the average joe in the street, look at http://www.npr.org/templates/story/s...oryId=95099470

Here is how complex the issue is

Sami

The bailout is not bailing out any ceos.. any employees any executives.
Thats what the public doesn't seem to understand.

Its to save the credit markets... which is the lifeline of a capitalist economy.
If thats freezes.. the economy well .. you know the rest

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Sami

The government is not using the money as a bailout. They are making an investment and a very good one at that.

They are going to create a dutch auction (reverse auction) and most likely get these papers at 20 - 30 cents on the dollar. They have the time and resources to hold these papers to maturity ... or once the markets for these papers become liquid.. flip them for break even or profit.


The alternative for not doing this... is that the markets for all debt will remain frozen. Eventually credit default swaps will start triggering as companies start going belly up due to no sufficient amount of capital to run their operations (Many companies rely on debt markets to fund themselves for day to day operations) ... trillions upon trillions of dollars of wealth will just evaporate.. and the domino effect will continue to god knows when.


The situation is really that bad... If the credit markets don't loosen up.. we'r literally looking at another depression.. and to be honest it would make 1930s seem like a day at disney land.

Although I doubt they would let this occur, the bail out will pass one way or the other.. there is simply no other choice!

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Pornwolf

They don't need to bailout any CEOs at this point, do you realize how much money they made in the past 5 years?

Raped and pillaged is too soft of a term to describe how they made out.

Now, we are left holding the bag while they basically take a vacation.


Real fucking nice. I don't think they could have planned it any better than this.

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Sami

And when the defaults rise on corporate debt.. the Chinese and other foreign investment banks/central banks that have been buying all us corporate debt (bonds, notes) will stop doing so... credit rating agencies will pull out their whips and ultimately the AAA rating on US debt in itself will be downgraded after all the things I've mentioned above occur.

Thinking about all the above just makes me want to vomit!
and the sad thing is its not fiction it will occur unless the appropriate measures are taken immediately this weekend.

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Boogie

Did I miss something? The economy could totally collapse tonight and we still do not go back to the stone age.

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Sami

sar·casm [sahr-kaz-uhm] Pronunciation Key - Show IPA Pronunciation
–noun
1. harsh or bitter derision or irony.
2. a sharply ironical taunt; sneering or cutting remark: a review full of sarcasms.

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Relentless

The *only* thing worse than bailing out the credit markets is spending 700 billion as a blank check that in the end fails to bail them out and just costs us another 700B.

The financial markets are like a basketball stuck in a tree at a playground. It's a great idea to throw your shoe at it IF you have something tied to your shoe so you can get it back along with the ball. Otherwise you have a very good chance of not getting the ball back and having to walk home with one fucking shoe. Only a retarded person signs a blank check for 700B in a state of panic.

Keep in mind...

The government has INSANE powers available that other entities do not have. They can close the financial markets and declare a bank holiday on Monday if they feel like it and want more time. Last week they made it illegal to short stocks on 100s of companies...

You are looking only inside the box for a solution and the government has wide ranging powers way OUTSIDE the box if they choose to use them. The markets will be fine, liquidity will be restored and we will keep both of our shoes.

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Playa'

Add the president to that mix.

crocop

because our economy is based on credit and when people cant get it in the form of loans etc, everybody suffers... our whole financial sysem is based on people spending what they dont have... if everyone had to pay cash for stuff imagine how badly it would hurt the economy... i used to pay cash for EVERYTHING, then i got in the habit of using a credit card... i always pay my ballance in full each month but using a card over cash has made me a lot more free with my expenditures

Atman

dont live in America but bad economy results in all world

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JohnWebcams.com

I wish I could buy $700b worth of mortgages at 20 cents on the dollar

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Sami

No kidding, thats my point !
The government is not buying CDS, they are going to buy paper with hard assets backing it.
They can easily hold it to maturity... for a huge profit or flip it for break even or smaller profit when the market for the CMOS becomes liquid.

If they manage this investment well.. the tax payers are in to make a large amount of profit!

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ICQ#: 311-848-143

Sami

Congress has one last chance to make it right on Thursday or else we will witness capitalism being murdered by democracy (what an oxymoron)


US lost 1 trillion dollars today. That is 300billion more than what the original deal was. How the public doesn't understand this is absolutely beyond me.

This was an actual loss, not an investment like what the bill had proposed!

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mikemcfadden

The builders are going to start their bankruptcy soon.

No shit its bad!

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Right before my very eyes.

google is great

Aloha nui loa

ICQ: 360151609

*KK*

It's not an actual loss unless everyone holding stocks sold them, or everyone owning stocks saw them delisted.

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Playa'

Or everybody does their part by taking all their money out the bank! lol

just doing my part

Sami

The A/D was 1:19 yesterday.
VIX at 40~

So yes people were selling!

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mikemcfadden

Their was a ton of loss. Sure... some have mutual funds and ride the wave but many either got out of positions, covered their options, hit their stop loss etc.
Those near retirement are feeling it the worst. To drive the market down more people need to sell then buy so many saw their portfolios decline while getting out of their positions.

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Right before my very eyes.

google is great

Aloha nui loa

ICQ: 360151609

*KK*

People sell and buy every day, you're missing the point. I took about an 8% hit yesterday overall, most of it on midcap indices, but what are you going to do? I move the money to something else, I'm for sure out the loss. I hold and see what happens for a few days, then make a decision, maybe it comes back up some. If it hits a certain % of loss, one that I have predetermined in my own head, then I cut my losses and move to something else. I think that jumping too soon is just as bad as waiting too long (which I probably did, the gains were going too well for the situation).

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james_clickmemedia

Great Article..

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Sami

hahahah

http://www.bloomberg.com/apps/news?p...FbY&refer=home

Lol.. after yesterdays fiasco finally the public wakes up.


``A lot of people called to complain about losing their shirt,'' said Sean Brown, press secretary for Republican Representative Joe Barton of Texas, who opposed the measure. Calls have gone from overwhelmingly against the bill to about 60- 40 or 70-30 in favor of it, Brown said.



Instead of 90210s and all the other crap on TV.. I think the government needs to make it mandatory to educate the public about these things through TV shows.

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*KK*

Interesting report on NPR today about how megayacht sales were HUGE at the Monaco Boat Show... Dow sees its third highest point gain ever today...

Even pimpdog hit the nail on the head in a thread he started -- there are bargains to be had and money can -- and will -- be made.

Someone sent me the michaelmoore.com rant of yesterday and there are certainly parts of it that make valid points. This bailout the way it was initially proposed DOES NOT WORK.

If it's passed in the form it was proposed, you can bet the bank on things getting a lot worse and taking a lot longer to get better.

Simple economics.

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Sami

Dow went up today on hopes of the bill passing tommorow. (notice the light volume compared to yesterday)

If it fails to pass again (which I would find truly shocking) look for another 500point + down day ... and gradually all the way down to 8000 level.

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pimpdog

I finally got recognized for my smartinesss?

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SanctimoniousPrick

Talk about it in about 6 weeks as to how bad the economy got.
This is only 'on the way to a real bad economy'!

B e f o r e!!

.......and after!!

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