Our financial system is crumbling this week.

[BW23]

Pelosi's statement on paper didn't seem all that inflammatory IMO. not sure of the timing and tone of it though.

Pelosi's not the only one being opportunistic with the grandstanding, some in the GOP even had the cajones to call for an end to capital gains tax. Sure its hard for some de-regulating fanatics in the GOP to eat crow. But, as Leroy said, 40% of dems voted against it too. but the rejection of the bailout is as much a reflection of the pissed off mood of the people now and confused politicians uncertain what to do about it considering the upcoming congressional elections.

But is the bailout necessary? Is that the answer? That's what I don't understand.

It's not like the problem wasn't coming for sometime. And Congress didn't want to address it before leaving. Now everyone's supposed to come together and agree quickly? I just don't think it's that easy.

When was the last time this much money was thrown at a "problem" in hopes of "solving" it (which has never happened with anything) without much discussion? Ever?

[cpebbles]

Taxpayers lending money to the banks so that they can lend money to the taxpayers. Apparently even Democrats believe in trickle-down economics in the financial sector.

Fact is, the people with the best idea of how bad the debt is that precipitated this crisis have been frantically looking to divest themselves of it, and the only potential buyer left is the government. If the debt is really bad, then we are just giving them money so they can lend most of it back to us (And enrich themselves with the rest). If it isn't that bad, which is the best-case scenario, then they're trying to convince us that the financial market will collapse due to its own irrationality unless we intervene and give them a deal that the free market wouldn't.

[AWvsCBsteeeerike3]

You're dead wrong, citing 5 examples doesn't excuse an entire sectoral problem. People are struggling to secure mortgage loans and small business loans. You think your neighborhood bank has the resoucres to allocate these loans without having to borrow from the banks that are dominating the headlines?

When they cut credit, so do your regional banks.

They need the bailout, it's unfortunate but they need it.

Of course, it's far from the only thing they need to address.

So, these people that just got loans didn't get them from the regional banks? They got them from the banks that aren't giving out loans? I don't quite follow. I'm not saying because I know of 4 people getting loans, that there isn't a problem. Just that there is money available to good investments. As a matter of fact, if you're buying a new home, this would be about the best time to do it, assuming good credit, as rates just dropped again. I don't know this for a fact, but according to these people that did it, and the realtor I talked to, it's true.

I agree people might be struggling to secure mortgage loans because that's the way it used to be and always had been. Good credit and a downpayment were necessary for a mortgage and that's what it takes now. I don't buy that if you walked up to a bank with 40K and asked for 160K more and could prove you had a household income of 200K and had good credit that they would turn you down. Call me naive, but they are still looking for good investments, and that would be one.

[UK]

So, these people that just got loans didn't get them from the regional banks? They got them from the banks that aren't giving out loans? I don't quite follow. I'm not saying because I know of 4 people getting loans, that there isn't a problem. Just that there is money available to good investments. As a matter of fact, if you're buying a new home, this would be about the best time to do it, assuming good credit, as rates just dropped again. I don't know this for a fact, but according to these people that did it, and the realtor I talked to, it's true.

I agree people might be struggling to secure mortgage loans because that's the way it used to be and always had been. Good credit and a downpayment were necessary for a mortgage and that's what it takes now. I don't buy that if you walked up to a bank with 40K and asked for 160K more and could prove you had a household income of 200K and had good credit that they would turn you down. Call me naive, but they are still looking for good investments, and that would be one.

They got the loans from the regional banks which got the money from a larger bank. People with good enough credit will get loans, but there's more people looking for credit than the market isd willing to give out and some of that is people with good credit. This is supply and demand, there's more demand than supply, since there is no price to off-set this, the economy as a whole loses resources.

That's where part of the problem is, this country's economy is based enough on credit to where a credit crunch will impact it as much as we've seen.

I think you're kidding yourself, if you think the credit crunch is applied to those with only bad credit scores.

[Freed Roger]

I'm not so sure about this approach Bsteeeeeerike3. stocks will go up and down from day to day. and sure there probably are some bargains out there.

Yes, the US stock market has always gone up over time, but when you study world history, economies (and their markets, currency value, etc) do faulter. dynasties like Roman empire and Great Britain were knocked back because they were overextended. I keep thinking of a book I read most of (too complex, I couldn't finish) called "Wealth and Democracy" by Kevin Phillips. He takes the long view, and points out a lot of current US economic trends that mirror former dynasties that passed their peak.

Older economies in Europe maxxed out on their potential long ago - they used up their natural resources and developed most of their space. Now their economies aren't as powerful. I guess, what I'm getting at - the US economy based on brain-dead consumerism and endless expansion is not sustainable. But something slightly less could be, and actually wouldn't be all that bad.

I don't think the sky is falling by any means-there are so many factors and variables to weigh - like potential growth in green tech, globalization, world sharing of risk. We're talking about stuff that makes heads spin.

I am pretty sure we're not going to go the way of the Roman Empire. And, it's not just blind optimism that drives that thought. As you eluded to, there are many needs this country has that will keep the growh from dwindling. The population is continuing to increase, the green energy is just a MASSIVE cash cow that is just getting its roots. Think how many jobs will be created constructing/designing large wind farms, nuclear power plants, etc. etc. etc. If the gov. is giving away a trillion dollars, it should be to this sector, not Wall Street. The nation's infrastructure needs a ton of work. That will create more jobs. and, those are just the ones that I'm familiar with in my line of work.

Unfortunately, freed, I don't think we'll end up in Hoovervilles.

Re-read the post. I don't think the sky is falling. I mention the same Green tech boom possibility that you do. but it is naive to think that a general plunking of money in US stocks will always yield long-term rewards. Money doesn't grow on trees. A US economy passed its peak doesn't have to mean disaster. It could mean we still have it pretty good, and our economy is based on slower, but sustainable growth.

but spare me a dime when you make your billions.

[greenback44]

the green energy is just a MASSIVE cash cow that is just getting its roots. Think how many jobs will be created constructing/designing large wind farms, nuclear power plants, etc. etc. etc.

Those jobs will be created at the expense of older energy jobs. Not speaking to the benefit to the planet, etc., it's a zero-sum gain as far as the national economy is concerned.

[AWvsCBsteeeerike3]

So, these people that just got loans didn't get them from the regional banks? They got them from the banks that aren't giving out loans? I don't quite follow. I'm not saying because I know of 4 people getting loans, that there isn't a problem. Just that there is money available to good investments. As a matter of fact, if you're buying a new home, this would be about the best time to do it, assuming good credit, as rates just dropped again. I don't know this for a fact, but according to these people that did it, and the realtor I talked to, it's true.

I agree people might be struggling to secure mortgage loans because that's the way it used to be and always had been. Good credit and a downpayment were necessary for a mortgage and that's what it takes now. I don't buy that if you walked up to a bank with 40K and asked for 160K more and could prove you had a household income of 200K and had good credit that they would turn you down. Call me naive, but they are still looking for good investments, and that would be one.

They got the loans from the regional banks which got the money from a larger bank. People with good enough credit will get loans, but there's more people looking for credit than the market isd willing to give out and some of that is people with good credit. This is supply and demand, there's more demand than supply, since there is no price to off-set this, the economy as a whole loses resources.

That's where part of the problem is, this country's economy is based enough on credit to where a credit crunch will impact it as much as we've seen.

I think you're kidding yourself, if you think the credit crunch is applied to those with only bad credit scores.

I don't think it's only people with bad credit. But, I thought you said that the larger banks were no longer lending money? That's what I said was untrue and you then said I was wrong. I'm not wrong. They are still lending money. They are still looking for good investments (always have been) even though they supposedly don't have any. What they want now is someone (namely you and me at 7K a piece and every body else on the board for the same price) to buy all their screw ups which I don't want to do. Imo, there are two options right now:

1) The government takes over and probably screws up the companies beyond what they are now becasue let's be honest, the government is a monumental screw up.

2) European banks come in and buy out what is left of these screwed up companies that have claimed bankruptcy but are still lending money as we speak (because it would cost them money not to). People that aren't going to give out stupid loans take over and they start loaning money again to good investments....because that is how they make money.

I'm all for option #2 as opposed ot #1.

[AWvsCBsteeeerike3]

the green energy is just a MASSIVE cash cow that is just getting its roots. Think how many jobs will be created constructing/designing large wind farms, nuclear power plants, etc. etc. etc.

Those jobs will be created at the expense of older energy jobs. Not speaking to the benefit to the planet, etc., it's a zero-sum gain as far as the national economy is concerned.

Not the design and construction part of it. The operation and maintenance, yes. But, as far as I know, there are very few coal power plants being designed/built right now.... in America at least.

[Arthur Dent]

What they want now is someone (namely you and me at 7K a piece and every body else on the board for the same price)

You may want to check your figures.

[AWvsCBsteeeerike3]

Re-read the post. I don't think the sky is falling. I mention the same Green tech boom possibility that you do. but it is naive to think that a general plunking of money in US stocks will always yield long-term rewards. Money doesn't grow on trees. A US economy passed its peak doesn't have to mean disaster. It could mean we still have it pretty good, and our economy is based on slower, but sustainable growth.

but spare me a dime when you make your billions.

Understood. I just see the stock market as a pretty good way to invest your money if you've got another 30 years before retirement. Like you said, it might not be, but I'm banking on it....and the RFID technology, but that's another story.

Anyway, sorry if my post came off strong.