Aces High Bulletin Board
General Forums => The O' Club => Topic started by: P1Tiger on September 29, 2008, 07:04:31 PM
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i didnt believe it would happen in my life time and here it is, i started to crash this morning
700 billion dollar bail out, and 66% of republicans voted no?
why? :confused:
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O'Club
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O'Club
oops my bad, lil tired today :rolleyes:
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I'm not sure but the news will tell us part of the story.
Many times reps vote no to stop dems from dipping their grubby little paws in the pot.
Turning news on now.
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Told you people.... :noid
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Most of the Democrat's henchmen were running the failing mortgage companies. Then the Dem's tried to say "HEY, we've got a fix" as a ploy to influence the upcomming presidential vote.
It's like letting the foxes run the chickencoop. Let the free market sort it out. The people who risked the money, lose the money. If I gamble in Vegas, I understand that I need to accept certain risks.
The Dem's in charge of the mortgage industry (Freddy/Fannie) kept saying how stable it was, and how we needed to ignore traditional lending practices like income and credit history in order to get more immigrants and minorities housing. Now they're not paying. Now they're looking for the rest of us to bail them out of the gamble they tried.
I say let 'em sink or swim, without my $10,000 that they're estimating it's going to take every working American to bail out the big companies with their huge bonuses to CEO's for inflated earning statements....
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It's an O'club topic but the simple reality is that the melt down is fake to a large degree. The bottom line is that a lot poor business practices were allowed. In some ways this ties back to the BK reforms that further allowed unsecured credit to be sold as a securities instrument. AIG and others actually are in worse shape from this type of gamble then mortgages. Funny that we can let major airlines go under but the moment the silver spoon set gets ruffled we have to bail out Skipper and Buffies trust funds. Absolutely nothing wrong with letting them all go BK. Remember that no assets are lost in a business BK only debt.
Let the chips fall where they will, in 2-3 years we'll be much better off. If this "aid package" actually passes we'll be in the financial stone age for a decade or more as we tumble to a true depression. Let everyone who cant weather the storm go down and then pump money in to support new growth...not to pay off bad debt. Every one of these companies made billions on the way up...let em lose them on the way down.
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I agree. Where the hell did the government plan to get that seven hundred mil, anyway? You can't spend.what you neve had.
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IN
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I agree. Where the hell did the government plan to get that seven hundred mil, anyway? You can't spend.what you neve had.
Not 700MM but 700 billion. The problem is the 7% single day adjustment took 1.2+ trillion off the top. So even a 700 billion plan would still have a 500MM shortfall. The problem is that you have trillions of $$$ in bad debt that has to go...now or later. The longer companies can carry this bad debt via accounting slight of hand the worse it will be. If we go back and look at ENRON the simple truth is that they did nothing that wasnt common, they just bet wrong a few years to early. Hell now they'd be at the front of the line for a bail out.
Buying bad debt wont create jobs or add to the GNP, any $ spent now for that purpose cant be lent to GM or US Air (2 at random) later. Let the market correct now and then funnel $$$ into the economy at the bottom. Any "soft landing" will just artificially delay recovery as companies hold losers hoping to get a bail out. You could actually accomplish more by voting a 100 Billion dollar amount and have companies bid a % for bad debt. The gov will retire bad debt to the lowest % bidders on bad mortgages then resell them or lease them. Everyone left standing is on there own. Then pump the other 1/2 trillion into the economy in a year to jump start it once we've hit bottom.
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:aok Snaphook
that solution is brilliant and makes sense. It doesn't have a chance in hell.
:)
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History will repeat it self. American time to step down as a powerful country is coming and China will take over. You can thank the CEOs who want more and more money
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It's an O'club topic but the simple reality is that the melt down is fake to a large degree. \
Funny that we can let major airlines go under but the moment the silver spoon set gets ruffled we have to bail out Skipper and Buffies trust funds. Absolutely nothing wrong with letting them all go BK. Remember that no assets are lost in a business BK only debt.
LET THEM BURN!
they rolled the dice in Vegas with their investments, let them reap what they sow. Sorry, but seeing hundreds of millions of dollars going to people at the top of the food chain, and then seeing them CRY for federal bail out when they get bit in the arse for their paper fortress...
Let 'em burn baby....
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Thats actually a bit of a stretch. While China is by far the largest market in overall potential its ability to successfully market products to other markets is somewhat lacking. India is a much more viable threat (along with Brazil) as up and coming economic super powers. So far the real issue seems to be who will capture the import market for China...not what China will export. The current US struggles are a direct result of an increasingly low standard for domestic leadership and tolerance of corruption and stupidity. We suffer from massive corruption all the way down to the city level (of all sizes). what's really needed is some serious accountability for all the pork barrel graft and out right criminal activity by our elected officials (among others)...
All you need to do is look at our current choices, neither of them is even remotely qualified for the task at hand. We now have government by the lowest common denominator and its showing. It wont matter who "wins" since the end result is going to be the same....we'll see a mixed "bail out" that will make billions for a select few and send us into a true depression. hopefully we'll actually elect some truly independent congressmen (vote every incumbent out on both sides) who initiate a real probe into the current broken system and roll a few heads. If you can put CEO's in jail you can put serving congressmen there as well.
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This does indeed need to be moved to the O' club, of which I made a rare visit there and repiled to a relevant topic, because there are things we can all do to survive what may come.
"It's times like this I am thankful for how I choose to lead my life, and raise my sons.
-I own my home. A used three-bedroom mobile home that cost all of $5000. Very humble.
-All of the vehicles my wife and I own, and we do indeed own them. An '86 Toyota pickup, a '95 Buick LeSabre, a '79 Trans Am, an '81 Ramcharger, and an '87 Dakota.
-We live on 10 acres out of town. The land has been in our family since the mid 1940's. My dad currently owns it, and it will eventually come down to my brother and myself. Therefore, food can be raised, money can be earned, enabling us to survive tough times.
-We have NO credit cards. If we do not have the cash, we don't buy it.
-For now, while I am employed, I work only six miles down the highway, so the high price of gas does not impact us too severely. (Guess which two vehicles I prefer to commute with regularly.)
-The only bills I pay are 1)Power, 2)Landline/Internet, 3)Cell phones, 4)Auto Insurance, and 5) Half of the property tax for the farm. My dad takes up the other half.
I just prefer to keep our finances as simple as we can make them, especially during times like this."
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Thats actually a bit of a stretch. While China is by far the largest market in overall potential its ability to successfully market products to other markets is somewhat lacking. India is a much more viable threat (along with Brazil) as up and coming economic super powers. So far the real issue seems to be who will capture the import market for China...not what China will export. The current US struggles are a direct result of an increasingly low standard for domestic leadership and tolerance of corruption and stupidity. We suffer from massive corruption all the way down to the city level (of all sizes). what's really needed is some serious accountability for all the pork barrel graft and out right criminal activity by our elected officials (among others)...
All you need to do is look at our current choices, neither of them is even remotely qualified for the task at hand. We now have government by the lowest common denominator and its showing. It wont matter who "wins" since the end result is going to be the same....we'll see a mixed "bail out" that will make billions for a select few and send us into a true depression. hopefully we'll actually elect some truly independent congressmen (vote every incumbent out on both sides) who initiate a real probe into the current broken system and roll a few heads. If you can put CEO's in jail you can put serving congressmen there as well.
Can we just do a ya old fasion of stoning all the CEOs who just have to much money.
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90%+ of CEO's earn every penny they get. The problem isn't really in corporate America per se. It's in our bloated pork barrel style government. This isn't a democratic or republican issue, the current administration is probably the worst ever. Literally billions of $$$ are being sucked out each year in Iraq alone. This is corruption on a scale so large its actually treasonous in my opinion. The issue here isnt the few large highly publicized corporations that are corrupt or at risk, its the 1000's of smaller firms that drive the economy of the nation, create real wealth and economic growth. Every single one of the fortune 500 should be allowed to fail (many are actually in good shape) if they are in trouble. There are plenty of other firms with better management that can absorb them. what we need to do is create a mega fund that will lend American money to American firms at zero interest for 10 yrs to facilitate this. Keep the ownership American and dont let Biff and Buffie use US tax dollars to snap up quality midsize firms that become starved for capital (this is the entire real intent of the "bail out". The crisis is one of liquidity, the banks are keeping money and creating a credit crisis. what the 700 billion will do is allow these scum suckers to retire bad debt and keep money tight, they will use this to leverage small sound firms who've relied on reasonable cost of money for growth. So the rich and feeble will buy tomorrows technological leadership for pennies on the $$$ via a crisis they've created.
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Screw giving that money to people who made the mistakes. Give me my share of the 700,000,000,000 and I'm guessing that would be around 15K-20K. I will pay of my debt which interns puts money into the banks and would make all who is 18 yrs and older stimulate this economy. I'm sure I'm way off but ist 12:30am and have to get up in 4 hrs. It makes sense to me right now but might change my mind in the morning. <S> to Humble who has shed some light on this difficult subject for which most of us will not understand.
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90%+ of CEO's earn every penny they get. The problem isn't really in corporate America per se. It's in our bloated pork barrel style government. This isn't a democratic or republican issue, the current administration is probably the worst ever. Literally billions of $$$ are being sucked out each year in Iraq alone. This is corruption on a scale so large its actually treasonous in my opinion. The issue here isnt the few large highly publicized corporations that are corrupt or at risk, its the 1000's of smaller firms that drive the economy of the nation, create real wealth and economic growth. Every single one of the fortune 500 should be allowed to fail (many are actually in good shape) if they are in trouble. There are plenty of other firms with better management that can absorb them. what we need to do is create a mega fund that will lend American money to American firms at zero interest for 10 yrs to facilitate this. Keep the ownership American and dont let Biff and Buffie use US tax dollars to snap up quality midsize firms that become starved for capital (this is the entire real intent of the "bail out". The crisis is one of liquidity, the banks are keeping money and creating a credit crisis. what the 700 billion will do is allow these scum suckers to retire bad debt and keep money tight, they will use this to leverage small sound firms who've relied on reasonable cost of money for growth. So the rich and feeble will buy tomorrows technological leadership for pennies on the $$$ via a crisis they've created.
I dont know about the 90%. More like 10%. Other than that, WE ARE SCREWED
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Screw giving that money to people who made the mistakes. Give me my share of the 700,000,000,000 and I'm guessing that would be around 15K-20K. I will pay of my debt which interns puts money into the banks and would make all who is 18 yrs and older stimulate this economy. I'm sure I'm way off but ist 12:30am and have to get up in 4 hrs. It makes sense to me right now but might change my mind in the morning. <S> to Humble who has shed some light on this difficult subject for which most of us will not understand.
700 billion actually is only about $2,300 or so per person based on the last census. That is the true underlying issue here. Remember we just had a economic stimulus package, we're talking about relatively small amounts of money overall within the context of the problem. what good did the last package due...not a thing. The entire goal is to put money in circulation. We tried to prime the pump at the grass roots level. The reality is most of that money went to service the same bad debt we still have. Now the theory is that by buying large amounts of worthless debt we will free up banks to lubricate the economy by creating liquidity. The problem is that the banks will have much tighter credit regardless. The only difference is if they can offload their bad paper or not. A buy out will allow them to maintain the accumulated private wealth while re-capitalizing the firms them selfs. This wealth will be used to acquire firms that need capital to maximize growth. So we will have a lot of mergers driven by need for capital. In addition these firms will buy large swaths of land at deep discounts which will sit idle for a decade or more and then be developed at huge margins beginning this cycle again in 20 years.
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700 billion actually is only about $2,300 or so per person based on the last census. That is the true underlying issue here. Remember we just had a economic stimulus package, we're talking about relatively small amounts of money overall within the context of the problem. what good did the last package due...not a thing. The entire goal is to put money in circulation. We tried to prime the pump at the grass roots level. The reality is most of that money went to service the same bad debt we still have. Now the theory is that by buying large amounts of worthless debt we will free up banks to lubricate the economy by creating liquidity. The problem is that the banks will have much tighter credit regardless. The only difference is if they can offload their bad paper or not. A buy out will allow them to maintain the accumulated private wealth while re-capitalizing the firms them selfs. This wealth will be used to acquire firms that need capital to maximize growth. So we will have a lot of mergers driven by need for capital. In addition these firms will buy large swaths of land at deep discounts which will sit idle for a decade or more and then be developed at huge margins beginning this cycle again in 20 years.
You must have a degree in economics.
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Funny how a barrel of oil drops in price, when the buyer AINT GOT NO MONEY,...lol It's been a fine 8 yrs huh???? phew. :O
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:rock :rock Snaphook for President :rock :rock
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i didnt believe it would happen in my life time and here it is, i started to crash this morning
700 billion dollar bail out, and 66% of republicans voted no?
why? :confused:
Same reason 40% of the Dems voted no, it's a bad deal.
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The more you say no to the rescue package the more money I make over here. Keep saying no and crash even harder :rock
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IN
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INdeed
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a 7% decline is not a crash, it is a buying opportunity. Of course if it keeps going down......
the fix is simple.
A change from mark to market accounting of assets to a rolling 3 year avg. ( i'm not going to explain it, look it up , do your homework) That by itself would free up capital for loans.
B No bailout gifts, make it a loan at 2% over treasury rates payable in 5 years. Let them work out of the bad debts, (Chrysler repaid the govt loan with interest ahead of time).
C Fire Paulson, he is the former head of goldman-sacks, goldman-sacks had a 20 billion stake in AIG, paulson gave AIG 85 billion. Conflict of interest.
No ,i'm not a economics expert, but i know someone who is.
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There are only 2 forms of accounting, asset based or cash based. The problem is that current accepted accounting practices allow for an asset to be carried for a period of 5 yrs at its purchase price. This is the underlying issue that caused the problems at Enron. The asset's lowered in value but the reported book keeping number remained high...the firm kept looking for additional assets to keep the balance sheet healthy and they also collapsed. So when the boks had to be adjusted they had a sudden major loss. Then under scrutiny other assets that had not hit the 5 yr limit were also very overstated with regard to current value.
The accounting practice itself in no way effects the amount of capital available for loans IMO. But what we have is a poor repeating business cycle. The CFO's major job in a big corporation is actually to support the CEO in his efforts to positively impact stock value (CEO's only true job). To do that he builds strong relationships with analysts/investment banks and then looks for ways to impact the firms balance sheet in a positive way. Very often firms are bought and then fractionalized. The end result is often a short term double whammy on the books as assets are carried at the inflated price and then cash/assets shown for spinoffs while charge offs are taken for restructuring. So we create both artificial gains and losses to manipulate the balance sheet. When in reality often these moves stifle innovation and have a true negative impact...so we have a "paper gain" and a true loss of value. This helps to explain how we had a "paper gain" {stock market} and a real errosion of output and a plummeting dollar. Our "investment banking" industry went from being bankers to being manipulators. The highest paid people on wall street are derivatives analysts, which highlights the issue. Basically these are the guys who create artificial metrics to game the system. So we went from a nation of builders of wealth to a nation of "gamers on wealth".
For every Bill Gates who can generate billions in real wealth we have 1000's of 3rd, 4th or higher generation "skippy the Vth" who went to princeton to play tennis and lives of the family trust fund. These relatively small numbers of very high value accounts drive a lot of this problem. These are the accounts that make money and then the major funds follow the trend. The "insider money" pulls out and the broader market is often left holding the bag. The policy makers and lobbiests who control the economics of wall street are the very same people who are managing the "bail out" ... which is where all those trillions of $$$ of profit are now safely sitting...waiting for the chance to "help us" out of a problem they created.
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Humble you're supposed to stop being so pertinent and informative and just post 'IN' :P
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Excellent editorial in Time magazine on this....
Do not be fooled. The $700 billion (ultimately $1 trillion or more) bailout is not predominantly for mortgages and homeowners. Instead, the bailout is for mortgage-backed securities. In fact, some versions of these instruments are imaginary derivatives. These claims overlap on the same types of mortgages. Many financial institutions wrote claims over the same mortgages, and these are the majority of claims that have "gone bad."
At this point, such claims have no bearing on the mortgage or housing crisis; they have bearing only on the holders of these securities themselves. These are ridiculously risky claims with little value for society. It is as if many financial institutions sold "earthquake insurance" on the same house: when the quake hits, all these claims become close to worthless — but the claims are simply bets disconnected from reality./i]
[urlhttp://www.time.com/time/business/article/0,8599,1845209,00.html?cnn=yes[/url]
Very easy to understand overview of whats actually happening. What we have is a fake crisis in the sense that its the investment arms them selfs that are failing, not the underlying assets. The "bail out" does nothing other then save the banks that have gotten caught in arbitrage. Every one of these guys from Frank to Paulson out to be in jail by the end of this. This is outright fraud, deception and lack of oversight by our own government.
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NEWSFLASH: For the second time in less than two weeks the world ended yesterday.
We know return to "business as usual"......
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In my opinion, a goodly portion of this is the result of the Fed trying to manage the economy and instead contributing to bubbles and crashes.
A lot of folks think that the Fed was formed as a result of the great depression to help stabilize the economy, but the Fed was in existence before the great depression. A lot of folks think that administrations (i.e., the democrats or republicans that happen to be in power at the time) control the Fed, but the Fed is not democratic or republican -- it is an independent entity and collection of banks with special rights. The Fed has the power to inject money into and take money out of our economic system, such as through the "open market" activities of, in effect, creating money and using it to buy government debt back from the public (causing interest rates to decrease) or by creating government debt and selling it to the public (causing interest rates increase). When people talk of decreasing interest rates, it means the Fed is pushing money into our economic system; and when they talk of increasing interest rates, it means the Fed is pulling money out of our economic system. That money injected into or taken out of the public sector goes into or comes out of other investments, which is why it has an impact.
The Fed is meant to use this control over money in the system to smooth our our economy (preventing bank panics, lessening irrational asset bubbles, avoiding things like the great depression, etc.). However, the Fed is controlled by fallable human economists; and economics, although considered a science, is very far from things like engineering or physics in terms of being able to calculate and prove correct solutions and courses of action. As one example, it has been more than 70 years since the great depression, and economists still do not all agree what caused it or how best to avoid such in the future, showing how imprecise the field still is.
To go back through just a couple of past bubbles and crashes, as a result of currency problems in the world (Russia, SE Asia, Latin America, etc.) and the collapse of Long-Term Capital Management (which had over a trillion dollars in derivative positions) in the 1990's, fearing contagion of the troubles and ramifications of the collapse, the Fed pressed on the gas pedal and pumped a bit of money into the system. Money pumped in goes somewhere -- in this case, helping to fuel (or at least not hindering) the dot-com bubble, which grew to insane proportions.
To reign in that "irrational exhuberance," the Fed then put on the brakes and started taking money out of the system. The unstable dot-com bubble (like most bubbles) didn't deflate in an orderly way -- it just crashed. From March of 2000 to September of 2002, the Nasdaq lost 76% of its value, trillions of dollars in wealth evaporated, and the economy took a dive. Also, there was the 9/11/2001 terrorist activity working to speed the economic downturn that was already well underway.
Now, the Fed stepped on the gas again, injecting a lot of money into the system, holding interest rates at historical lows for several years. As interest rates decline toward zero, real estate prices rise, entities can borrow increasingly larger sums (as they can still service the debt), which can be plowed into real estate that can be sold later at a profit, etc. We now had a real estate bubble growing to irrational proportions.
To reign in that bubble, the Fed started taking money out of the system (increasing interest rates). However, again, developed bubbles tend to be unstable, and like with the dot-com bubble, this one didn't deflate in an orderly way -- it just collapsed.
The Fed (and our government overall now) are again stepping hard on the gas, working to inject money into the system. I'm wondering what the next bubble will be. Alternative energy? Gold? I wish I knew.
Bubbles and crashes are part of the system whether the Fed is involved or not, but I have a suspicion there would be less volatility without the Fed than with it.