Stock Market and the Economy

[Tami]

This may seem nieve, but I was wondering --- if everyone who had between one hundred and one thousand dollars that they could spare, used it to buy stocks -- would that help the economy?

I've never bought stocks before, but I am seriously thinking of doing so.

[Dom]

Nevermind that.

If anyone is sitting on some cash, and has a strong stomach, they should be watching the market like a hawk.

I liked Apple at $100, I love it at $85.

[Shellhead]

The stock market is a high-risk sideshow. Your modest hypothetical purchase of stock would do little to stem the current tide of investor hysteria, so whatever you bought would probably lose value in the near future. In some cases, your investments might actually become worthless before the economy gets better this time around.

70% of the real American economy is driven by consumer spending, at least in modern times. Do your patriotic duty and go shopping. But if you don't have at least three months worth of expenses saved in the bank, and if you have any kind of credit card debt, you would be better off staying away from the mall for now.

[DoctorDoom]

Nevermind that.

If anyone is sitting on some cash, and has a strong stomach, they should be watching the market like a hawk.

I liked Apple at $100, I love it at $85.
That's who I'm watching.

[SUPERECWFAN1]

Let er burn......let the son of bitch burn ! Its making gas go down. :tongue:

[Steward Ace]

Let er burn......let the son of bitch burn ! Its making gas go down. :tongue:

On the other hand, a hefty chunk of my income comes from stock dividends. I'm watching my ability to pay bills drift away- or at least get reduced significantly.

But, I do get a kick out of watching the house of cards fall apart, in a watching-the-train-wreck kind of way. :evilsmile:

[jackolover]

On another note, has there been any news or indication of home repos increasing rapidly in the US? What about other indicators like more job losses in the US?

To my mind, the severe drops so far on the all ordinaries are already passing the trigger points that indicate a long term financial downturn, that lead to industry slowdown, loan and shorterm industry loans for wages, being called in, and leading to the consequential closure of food houses like Safeways and other chains, solely dependant on people having jobs to pay for Safeways etc, merchandise.

[Shellhead]

On another note, has there been any news or indication of home repos increasing rapidly in the US? What about other indicators like more job losses in the US?


Not yet, at least not in recent weeks. But I saw an article this morning that said that 1 in 6 American homeowners are "underwater." Meaning the value of their homes dropped below what they owe on their mortgages. They don't have any equity in their homes right now. That makes it impossible to re-finance and painful to sell.

http://articles.moneycentral.msn.com/Banking/HomeFinancing/nearly-1-in-6-homeowners-underwater.aspx

[Shellhead]

I have to laugh at the notion that China could bail us out. First of all, they have already invested heavily in U.S. treasury notes that now have a dubious value. Second, their economy is based heavily on exports, so the economic woes in the rest of the world will soon lead to a big drop in demand for Chinese exports.

[jessecuster3]

This may seem nieve, but I was wondering --- if everyone who had between one hundred and one thousand dollars that they could spare, used it to buy stocks -- would that help the economy?

I've never bought stocks before, but I am seriously thinking of doing so.

Its an admirable effort but diversification is the key. If you are interested in long term investing to save for retirement or some such, now is a great time to be doing that. But you do not necessarily have to buy one individual stock, mutual funds or hedge funds are the way to go, especially ones that mimic the overall market.

Here is a graph of the S&P 500, which is a collection of 500 different stocks that have been determined to be a bellweather of the overall market:

http://www.edinformatics.com/investor_education/450px-SP500FF.svg.png


As you can see, over history the overall trend is up. While yes, there are peaks and valleys along the way, they are seldom more than a couple of years. If you are in for the long haul, investing in the market is always a smart way to go.

[Merey]

Here's (http://www.npr.org/templates/story/story.php?storyId=95591162) a story I heard on NPR this morning that nicely illustrates the core problem of the crisis.

[DonC]

Nevermind that.

If anyone is sitting on some cash, and has a strong stomach, they should be watching the market like a hawk.

I liked Apple at $100, I love it at $85.

Last week some people at one of the banks I pick up at were going ga-ga over National City Corps. stock. It had fallen to $1.25 and their logic was that it can really only go up. There's also a lot of talk about them being bought out. I don't know what that would do to the stock, though. I'm not all that hip to the market.

[Titan76]

This is somewhat off topic but I want to ask, what is the best way to get in the stock market?

I heard Etrade is a good place to go and purchases stocks, is that true? I would rather buy, trade, and sell stocks online so what would be the best sites for this? Any help would be great.

[LtMarvel]

NPR on the way home:

GM has about a year's worth of cash left.

Ford, two.

[jackolover]

Not yet, at least not in recent weeks. But I saw an article this morning that said that 1 in 6 American homeowners are "underwater." Meaning the value of their homes dropped below what they owe on their mortgages. They don't have any equity in their homes right now. That makes it impossible to re-finance and painful to sell.

http://articles.moneycentral.msn.com/Banking/HomeFinancing/nearly-1-in-6-homeowners-underwater.aspx

Thanks for the update.

Any indication that the Russian Stock Market hasn't suffered as much as the rest of us? What about the Middle East Stock markets? Have they crashed like ours, or do they even have a stock market?

I'm just trying to pin down who would gain from this kind of economic downturn. I know Iran is saying this is the collapse of America, but I can put that down to political expediency.

This sure sounds like Brubakers Captain America, with the Red Skull being successful beyond his wildest dreams.

[mikekerr3]

Thanks for the update.

Any indication that the Russian Stock Market hasn't suffered as much as the rest of us? What about the Middle East Stock markets? Have they crashed like ours, or do they even have a stock market?

I'm just trying to pin down who would gain from this kind of economic downturn. I know Iran is saying this is the collapse of America, but I can put that down to political expediency.

This sure sounds like Brubakers Captain America, with the Red Skull being successful beyond his wildest dreams.


The Russian stock market has actually taken a worse hit than us over the last few months and especially over the last week, The Iranian stock market is doing well everyone else is taking a bath.

[SUPERECWFAN1]

Well look on the bright side people......it can't possibly get much worse....being honest...how bad can it actually get ?:tongue:

[mikekerr3]

Well look on the bright side people......it can't possibly get much worse....being honest...how bad can it actually get ?:tongue:

Your probably not old enought to rember the old comedy line from Cosby. When you say it's can't get any worse, what comes along... WORSE

The Dow still has about 8000 points to lose and unemployent still hasn't hit 50% yet, so it's best not to tempt fate

[jackolover]

The Russian stock market has actually taken a worse hit than us over the last few months and especially over the last week, The Iranian stock market is doing well everyone else is taking a bath.

The Russian Market I heard about.

What I don't get is why the Iranian Market hasn't been hit hard with the price of oil diving from $US150 a barrel to $US88 a barrel. How can they take a hit like that?

[mikekerr3]

The Russian Market I heard about.

What I don't get is why the Iranian Market hasn't been hit hard with the price of oil diving from $US150 a barrel to $US88 a barrel. How can they take a hit like that?

Because the oil is mostly not sold by companies on their stock market. They have plenty of internal cash reserves so the cash flow/credit crunch doesn't bother them much.

The goverment and foreign companies take the hit on oil prices.

[jackolover]

Because the oil is mostly not sold by companies on their stock market. They have plenty of internal cash reserves so the cash flow/credit crunch doesn't bother them much.

The goverment and foreign companies take the hit on oil prices.


That's one insulated system, the Iranian Stock exchange. They have a reason to be cocky.

[DonC]

This is somewhat off topic but I want to ask, what is the best way to get in the stock market?

I heard Etrade is a good place to go and purchases stocks, is that true? I would rather buy, trade, and sell stocks online so what would be the best sites for this? Any help would be great.


I don't own any stock but it seems to me that if you're a total newb at it you should go to a stock broker first. Let them show you how it's done and what everything means.

[darkhanamaru]

NPR on the way home:

GM has about a year's worth of cash left.

Ford, two.

Maybe its time to put all those workers to work making solar panels and windmills...

[darkhanamaru]

I don't own any stock but it seems to me that if you're a total newb at it you should go to a stock broker first. Let them show you how it's done and what everything means.

Best thing is just to get a low cost account, use the tools to do research on funds and their risk, and buy simple index funds or mutual funds based on your profile and when you expect to need the money. no need to use a broker unless you have lots of money to invest. they will only rip you off.

[jessecuster3]

Best thing is just to get a low cost account, use the tools to do research on funds and their risk, and buy simple index funds or mutual funds based on your profile and when you expect to need the money. no need to use a broker unless you have lots of money to invest. they will only rip you off.

There is a difference between a broker and a financial advisor. What you should do is talk to someone about what your goals are and determine how best to invest in the market based on those goals. For some people CDs will be fine, for others high risk securities.

[mgs]

the reason the market is crashing is because all those who hold millions and millions of dollars invested are pulling out and demanding their invested money. It would take a lot more than everyone investing back in one thousand dollars into the market. It will come back up again, but till then, investing in lowering stocks is not good.

[mikekerr3]

I don't own any stock but it seems to me that if you're a total newb at it you should go to a stock broker first. Let them show you how it's done and what everything means.

You should study for yourself, the stock brokers profit come from you buying and selling stock not your profits. He has an interest in you buying and selling as much as possible which can eat you investments on fees and tax's alone. It's not wise to trust people to act against their own interest unless know them.

An investment counselor who does not work for a stock trading company is a wise move though

[mikekerr3]

Maybe its time to put all those workers to work making solar panels and windmills...

If they just had the capitol to revamp the factories it might be a good idea, but I doubt they can borrow the money to do it.

[fly on the wall]

Do you think if we have a Great Depression they will have to turn off the internet?

Will we call it the Great Depression Two like WW2 was called?

These are important questions.

[K'Nort]

Depression Two.....


Anyway, here's an interesting angle (http://ap.google.com/article/ALeqM5hiFd5rUJI3JIRbbO1zwZr5u3UflAD93NRAGG0).

NEW YORK (AP) — When financial panic sweeps Bedford Falls in the 1946 movie "It's a Wonderful Life," the villain, Mr. Potter, moves to snap up the Bailey Bros. Building and Loan, offering a fire-sale price of 50 cents on the dollar.

"I may lose a fortune," Potter says with a smirk. The picture's hero, George Bailey, knows better. "He's picking up some bargains," he tells stockholders.

That kind of bold opportunism has made capitalists rich for centuries. Now, legions of like-minded bargain-hunters stand ready to do some Potter-style shopping of their own amid the nation's financial crisis.

"Vulture" investors, as they are called, have raised tens of billions of dollars over the past year in anticipation of opportunities to scavenge distressed assets and debt at discounted prices.

Speculators are eyeing potential profits in many of the same areas now at the center for the financial mess: real estate in foreclosure-plagued Florida, high-yield commercial paper, and pools of questionable mortgages.

Yet, so far, most have hesitated to swoop in. Instead, they have circled and watched for nearly a year as the turmoil worsened, wary about committing to anything with the financial system in chaos.

"These people have been waiting for the bottom to be reached before they plunge in, and then they take the risk of having the price drop even more," said Roy Smith, a finance professor at New York University.

The vultures have been skittish for another reason: The poorly performing mortgages at the root of the crisis were repackaged, resold, sliced apart and pooled together in so many complicated ways that even the best-trained experts have trouble understanding their value.

"There are investors who have pools of loans, and they don't know where the assets are," said Harvey Green, chief executive and president of Marcus & Millichap, a large commercial real estate investment brokerage based in Los Angeles.

Some of these factors might begin to change in the coming months as the federal government begins trying to stimulate the credit markets with its $700 billion bailout.

If it works, the private sector may be ready to pounce. Dow Jones Private Equity Analyst said Tuesday that 18 distress funds have raised $37.9 billion so far this year. One big player, Oaktree Capital Management, has set aside a whopping $10.6 billion to invest in distressed debt. Goldman Sachs announced last fall that it had raised $4.5 billion to invest in distress opportunities in the credit markets. Even Lehman Brothers had been preparing a $1.25 billion fund for distressed mortgage-backed securities before filing for bankruptcy last month.

"There is much more money raised for these distressed assets than there are distressed assets themselves," said Tomasz Piskorski, assistant professor of finance at Columbia University.

[fly on the wall]

I remember watching Gore Vidal on some news/talk show just before the ultra-close election of 2000. No one had any idea who would win between Gore and Bush but Vidal declared that he knew the name of the next president.

"What is it?" demanded the talk show host.

"Hoover." said the crafty Vidal because he had already said the economy was set up for a major crash of Great Depression proportions. Keep in mind that this was way before the crazy stupid real estate Bubble so Vidal was more Oracle right than Rational right. But unfortunately for us it appears Vidal was right. We are going to have a Depression and Bush will be the new Hoover, rightfully or wrongly. Because rationally we know that there is plenty of blame to go around however the main rule we get from all this is you don't loan money to people who are unlikely to be able to pay it back.

But Kudos to Gore Vidal.

"Hoover!" indeed.

I voted for Gore in case you wondered. It was a very difficult decision since I'm Republican but I still think it was the correct decision. Not that it would necessarily have prevented our current economic crisis, I doubt that Gore would have prevented it. He may have even accelerated it.

But no way would Gore have started that Iraq War.

[Serik]

Best thing is just to get a low cost account, use the tools to do research on funds and their risk, and buy simple index funds or mutual funds based on your profile and when you expect to need the money. no need to use a broker unless you have lots of money to invest. they will only rip you off.


Sound advice. Trading individual stocks is something I wouldn't do, especially through E*TRADE or whoever. Keep in mind that you're competing with thousands of professional traders who have more resources and knowledge than you.

I've been meaning to investigate index funds after several financial advice articles/books highly recommended them. One of their main selling points is low fees when compared to professionally-managed mutual funds.

Apparently, the Vanguard S&P 500 index fund has gained a nice 11% since its inception in 1976.

[jackolover]

Do you think if we have a Great Depression they will have to turn off the internet?

Will we call it the Great Depression Two like WW2 was called?

These are important questions.

Maybe not turn it off, but either the internet companies fold, and the service providers have to turn off the internet, or, you'll be so broke, you can't afford it, because you'll be living in a dormatory. But you'd think government and military satellites would still be functional, so there will be an internet available, despite the private versions going belly up.

I'm not too sure what they will call it, but the Second Depression is one option.

[mattx110]

"D2: The mightily fucked"

[Paradox]

I knew there was a reason I voted for you for CotM. :biggrin:

[mikekerr3]

Maybe not turn it off, but either the internet companies fold, and the service providers have to turn off the internet, or, you'll be so broke, you can't afford it, because you'll be living in a dormatory. But you'd think government and military satellites would still be functional, so there will be an internet available, despite the private versions going belly up.

I'm not too sure what they will call it, but the Second Depression is one option.

No reason for it too the infrastructure is already built, and the costs of running the internet are actually very low. Building capacity is expensive the cost to run in are minimal.

Too much rides on the internet for it to be shut down, besides since nobody owns it who could.

[Puma]

Do you think if we have a Great Depression they will have to turn off the internet?

Will we call it the Great Depression Two like WW2 was called?

These are important questions.

Instead of 'Hoovervilles' will the camps be 'Bushburgs'?

[mattx110]

Instead of 'Hoovervilles' will the camps be 'Bushburgs'?
I for one don't want to have an extended stay in a bush-anything.

20 minutes is max.

[Fenris]

NPR on the way home:

GM has about a year's worth of cash left.

Ford, two.

Dramatic, vaguely-related factoid (http://www.crossingwallstreet.com/archives/2008/10/gm_nearing_a_pe.html): GM's stock is now worth less than it was in 1929.

õ
I'm investing in Oprah!

[fly on the wall]

Maybe not turn it off, but either the internet companies fold, and the service providers have to turn off the internet, or, you'll be so broke, you can't afford it, because you'll be living in a dormatory. But you'd think government and military satellites would still be functional, so there will be an internet available, despite the private versions going belly up.

I'm not too sure what they will call it, but the Second Depression is one option.


Are you trying to say this will be the end of posting on 4 dollar 22 page comic books as we know it?

[Fenris]

Do you think if we have a Great Depression they will have to turn off the internet?

Will we call it the Great Depression Two like WW2 was called?

These are important questions.

And #3: will we get out of it the way we got out of Great Depression I?

õ
I guess that depends on the Germans!

[Paradox]

fly on the wall wants to know the shape of things to come:

Are you trying to say this will be the end of posting on 4 dollar 22 page comic books as we know it?


Yes.






They'll be $8. :biggrin:

[jackolover]

Are you trying to say this will be the end of posting on 4 dollar 22 page comic books as we know it?

Hey. If we can't afford the comics, the comic companies can't afford to print them on paper. I always thought the Brazilian forests were being harvested so we can buy our books on the shelves. One day, the paper has to run out, but in the mean time, maybe Marvel will have to reduce costs, and writer and artist wages will fall. If I can't afford $20 a week in comics, somethings got to give.

[mikekerr3]

Yes.






They'll be $8. :biggrin:

They will be gone if people can't afford them, There is the shcking fact to consider that they are not necessities and they are a vulnerable business being such a niche market to begin with.

[jackolover]

And #3: will we get out of it the way we got out of Great Depression I?

õ
I guess that depends on the Germans!

What is with the 'o' squigly? Is that something significant?

Like all things in collapse, it does seed a bed of discontent, and somebody is going to want to harvest it.

[Fenris]

What is with the 'o' squigly? Is that something significant?

In some browsers, it is the Great Signature Wolf of Destiny!

(Yes, really!)


Like all things in collapse, it does seed a bed of discontent, and somebody is going to want to harvest it.

That's true. But it's not always a bad harvest; good things can come of it.
The 30s were just exceptionally bad planting, to stretch the metaphor further than it has any tasteful right to go.

õ
But possibly far enough!

[mikekerr3]

In some browsers, it is the Great Signature Wolf of Destiny!

(Yes, really!)




That's true. But it's not always a bad harvest; good things can come of it.
The 30s were just exceptionally bad planting, to stretch the metaphor further than it has any tasteful right to go.

õ
But possibly far enough!

I believe the monsters of the 20th century came more from WWI and it's aftermath than the depression. The economic chaos just made it slightly easier. Germany was gutted by the peace treaty, and Russia gutted by the war and rule by centuries of thugs.

I am more afraid of another Huey long than another Hitler, just becuase it is more likely.

[jackolover]

I believe the monsters of the 20th century came more from WWI and it's aftermath than the depression. The economic chaos just made it slightly easier. Germany was gutted by the peace treaty, and Russia gutted by the war and rule by centuries of thugs.

I am more afraid of another Huey long than another Hitler, just becuase it is more likely.

Quote from Wiki:

"According to Long biographers T. Harry Williams and William Ivy Hair, the senator never intended to run for the presidency in 1936. Long instead planned to challenge Roosevelt for the Democratic nomination in 1936, knowing he would lose the nomination but gain valuable publicity in the process. Then he would break from the Democrats and form a third party using the Share Our Wealth plan as a basis for its program. He also planned to use Father Charles Coughlin, a Catholic priest and populist talk radio personality from Royal Oak, Michigan; Iowa agrarian radical Milo Reno; and other dissidents. The new party would run someone else as its 1936 candidate, but Long would be the primary campaigner. This candidate would split the progressive vote with Roosevelt, thereby resulting in the election of a Republican as president but proving the electoral appeal of Share Our Wealth. Long would then run for president as a Democrat in 1940. In the spring of 1935, Long undertook a national speaking tour and regular radio appearances, attracting large crowds and increasing his stature".

He does sound like Brubakers Senator in the Cap Presidential campaign in 'Death of Cap'.

Apart from Longs bullying tactics, his social radicalism seems to be his only downfall, because he aligned himself against the wealthy in America. He was shot. Big surprise.

Some of Longs ideals were not that outlandish, and he seemed to have a heart towards the little guy, and no patience for the powerful. Like I say, apart from his bullying, his ideas were nice, if impractical.

[mikekerr3]

Quote from Wiki:

"According to Long biographers T. Harry Williams and William Ivy Hair, the senator never intended to run for the presidency in 1936. Long instead planned to challenge Roosevelt for the Democratic nomination in 1936, knowing he would lose the nomination but gain valuable publicity in the process. Then he would break from the Democrats and form a third party using the Share Our Wealth plan as a basis for its program. He also planned to use Father Charles Coughlin, a Catholic priest and populist talk radio personality from Royal Oak, Michigan; Iowa agrarian radical Milo Reno; and other dissidents. The new party would run someone else as its 1936 candidate, but Long would be the primary campaigner. This candidate would split the progressive vote with Roosevelt, thereby resulting in the election of a Republican as president but proving the electoral appeal of Share Our Wealth. Long would then run for president as a Democrat in 1940. In the spring of 1935, Long undertook a national speaking tour and regular radio appearances, attracting large crowds and increasing his stature".

He does sound like Brubakers Senator in the Cap Presidential campaign in 'Death of Cap'.

Apart from Longs bullying tactics, his social radicalism seems to be his only downfall, because he aligned himself against the wealthy in America. He was shot. Big surprise.

Some of Longs ideals were not that outlandish, and he seemed to have a heart towards the little guy, and no patience for the powerful. Like I say, apart from his bullying, his ideas were nice, if impractical.


Read a little farther his big guys were anyone who was not a white protestant, who was educated , or thought that government was not to be rum by the whim of demagogues.

The man thrived on making poor people believe that all thier [problems where the fault of other that Huey would take down. I think his platform could be though of as national socialism light, but with more people to hate. Thankfully we will never know to what level he would have taken the hatred though

[jackolover]

Read a little farther his big guys were anyone who was not a white protestant, who was educated , or thought that government was not to be rum by the whim of demagogues.

The man thrived on making poor people believe that all their [problems where the fault of other that Huey would take down. I think his platform could be though of as national socialism light, but with more people to hate. Thankfully we will never know to what level he would have taken the hatred though

Most of that Wiki article doesn't convey any racist overtones. There is a mention of Longs many organizations that he founded with 7.5 million members, but there is no mention about the details of those 'clubs'.

I got to tell you, as a historical figure Long is not prominent, at least not outside America. I hadn't heard of him. Was he what, like Al Capone or something? I mean he could have got lost in that whole era of political turmoil as just another political character. It doesn't look like he got close to gaining the Presidency, and therefore, turning America into something unrecognizable. It seems like the political US system has a way of culling this type of radicalism, anyway, or am I wrong? Is it possible someone like Huey could rise and take over the US in this day and age?

[mikekerr3]

Most of that Wiki article doesn't convey any racist overtones. There is a mention of Longs many organizations that he founded with 7.5 million members, but there is no mention about the details of those 'clubs'.

I got to tell you, as a historical figure Long is not prominent, at least not outside America. I hadn't heard of him. Was he what, like Al Capone or something? I mean he could have got lost in that whole era of political turmoil as just another political character. It doesn't look like he got close to gaining the Presidency, and therefore, turning America into something unrecognizable. It seems like the political US system has a way of culling this type of radicalism, anyway, or am I wrong? Is it possible someone like Huey could rise and take over the US in this day and age?

A bullet cured that radicalism, we have been prety lucky in the US and haven't had a populist murderer in the White house since Jackson. Long was building power base when he was killed.

There is a classic movie about him "All the kings Men" check it out:biggrin:

[mattx110]

A bullet cured that radicalism, we have been prety lucky in the US and haven't had a populist murderer in the White house since Jackson. Long was building power base when he was killed.

There is a classic movie about him "All the kings Men" check it out:biggrin:
And a newer movie, but this one has Jude Law in it.

What're you gonna watch?

[Michael P]

A bullet cured that radicalism, we have been prety lucky in the US and haven't had a populist murderer in the White house since Jackson. Long was building power base when he was killed.

There is a classic movie about him "All the kings Men" check it out:biggrin:

Actually, All The King's Men is a novel. And the character in it is loosely based on Long.

[mikekerr3]

And a newer movie, but this one has Jude Law in it.

What're you gonna watch?

The old one deserves the term classic, the remake was good but not great.

[mikekerr3]

Actually, All The King's Men is a novel. And the character in it is loosely based on Long.

Ther Novel was hard for me to read, didn't like the sytle. the movie version was fantastic. One of the few times when the movies was better than the novel in my opinion.

I thought the movie would be more accessible.

[Shellhead]

I confess that I've been feeling grim satisfaction lately about the economy. I've been disgruntled about the housing market for more than a decade, and even longer than that about lax auditing methods used by the big CPA firms. Greedy labor unions priced us out of an increasingly global labor market, and greedy CEOs have been vastly overpaid for lackluster performance and criminal exploits. And all of this happened while most Americans were distracted by expensive and pervasive entertainment, everywhere they looked. We have spent years getting into this mess, and it will take years to get back out, assuming that we can quickly get to work on realistic solutions.

[o1pickleboy]

I confess that I've been feeling grim satisfaction lately about the economy. I've been disgruntled about the housing market for more than a decade, and even longer than that about lax auditing methods used by the big CPA firms. Greedy labor unions priced us out of an increasingly global labor market, and greedy CEOs have been vastly overpaid for lackluster performance and criminal exploits. And all of this happened while most Americans were distracted by expensive and pervasive entertainment, everywhere they looked. We have spent years getting into this mess, and it will take years to get back out, assuming that we can quickly get to work on realistic solutions.

Price out of the market? It was the market the changed it price on us. With the globalization the market price is well below minimum wage. Union or not, I can't legally compete.

[jackolover]

Price out of the market? It was the market the changed it price on us. With the globalization the market price is well below minimum wage. Union or not, I can't legally compete.

Yeah, some wise arse politicians thought it was a good idea to globalise trade and the economy, so that all protection ceased. Now whenever anything goes belly up somewhere else, the local market gets kicked in the pants right along with it. Thanks for the vulnerability.

Show me the upside here.

[mikekerr3]

Yeah, some wise arse politicians thought it was a good idea to globalise trade and the economy, so that all protection ceased. Now whenever anything goes belly up somewhere else, the local market gets kicked in the pants right along with it. Thanks for the vulnerability.

Show me the upside here.

The Upside: The price of your TV and your computerand the clothing on your back?

The Downside: Being able to afford those things gets increasingly more iffy

[LewMoxinsghost]

Hey, whoever said "buy Apple stock"- good call. I looked for the post but haven't offically woken up yet so I didn't find it.

http://www.thestandard.com/news/2008/10/13/tech-stocks-rebound-microsoft-apple-google-rim-see-double-digit-rises

[K'Nort]

I confess that I've been feeling grim satisfaction lately about the economy. I've been disgruntled about the housing market for more than a decade, and even longer than that about lax auditing methods used by the big CPA firms. Greedy labor unions priced us out of an increasingly global labor market, and greedy CEOs have been vastly overpaid for lackluster performance and criminal exploits. And all of this happened while most Americans were distracted by expensive and pervasive entertainment, everywhere they looked. We have spent years getting into this mess, and it will take years to get back out, assuming that we can quickly get to work on realistic solutions.

I will be incredibly surprised if executive pay comes down as part of all this.

[jackolover]

I will be incredibly surprised if executive pay comes down as part of all this.

Has it been as simple as 'Greed is good'? Can we blame this whole thing about the stocks crashing on managers being incompetent?

In my opinion I think the money lenders were irresponsibly throwing money at people with no deposit and no security, purely on the weight of the clients continuing employment wage. If the person losses their job, the whole stack of cards comes tumbling down. So when did money lenders lose sight of the basic rule - never make unsecured loans?

God, have all the people who remembered the Depression all had memory fade? After that debarkle, you couldn't get a loan unless your Uncle was willing to hand over the deed to his house, so you could get a first mortgage, and you still had to find 25% of the money or take out a second mortgage. Then came the 80's and all those rules were forgotten.

[LewMoxinsghost]

Has it been as simple as 'Greed is good'? Can we blame this whole thing about the stocks crashing on managers being incompetent?

In my opinion I think the money lenders were irresponsibly throwing money at people with no deposit and no security, purely on the weight of the clients continuing employment wage. If the person losses their job, the whole stack of cards comes tumbling down. So when did money lenders lose sight of the basic rule - never make unsecured loans?

God, have all the people who remembered the Depression all had memory fade? After that debarkle, you couldn't get a loan unless your Uncle was willing to hand over the deed to his house, so you could get a first mortgage, and you still had to find 25% of the money or take out a second mortgage. Then came the 80's and all those rules were forgotten.

Are you saying that even if a person has good credit and a job, that unless they also have something for collateral, they should not be able to get a home loan?

[Shellhead]

I will be incredibly surprised if executive pay comes down as part of all this.

I agree. But I would at least like to see the stock options out of the picture. What we should have all learned from that wave of Enron-type scandals was that executives shouldn't have stock options. Because when they do, they have a powerful incentive to manipulate the financial statements.

[LtMarvel]

Everyone,

I suggest you listen to this report from earlier this year (http://www.thislife.org/Radio_Episode.aspx?episode=355). This describes exactly what caused the housing crisis, and thus, the current financial crisis.

[Shellhead]

Everyone,

I suggest you listen to this report from earlier this year (http://www.thislife.org/Radio_Episode.aspx?episode=355). This describes exactly what caused the housing crisis, and thus, the current financial crisis.

I definitely agree with their premise. Yeah, easy consumer credit plus irresponsible spending habits got us into this mess. Easy credit bid up housing prices despite declining (inflation-adjusted) wages, and then a lot of other spending went to unnecessary consumer goods. No bailout plan will change the harsh reality that consumer spending needs to slow down until a lot of debt is paid off and some money gets saved.

Here's what I expect in the near future:

The stock market will be unsettled, but relatively stable for the short-term. Retail sales will be terrible this holiday season, leading to an unprecedented number of store closures in January. Some would like to close now, but they can't afford to miss even a bad holiday season.

So unemployment will jump again in January, and some big corporations may also announce large lay-offs as they deliver disappointing fourth quarter numbers. GM will go under next summer, unless the feds do a really stupid bailout. Either way, Chrysler won't buy into that mess, and they will have their own problems. Buyout or not, it just doesn't make sense to build vehicles in the U.S. these days, because union labor and executive greed have combined to make the prices unreasonable.

By the time those autoworkers hit the unemployment line in big numbers, we should be at 10% unemployment or worse. Consumer spending will be dismal, as even people with spare cash will be worried. We will enter into a vicious cycle where low consumer spending causes more layoffs which causes even lower spending. The only way out will be hard work and responsible behavior.

[Shellhead]

Also, every level of government will be feeling financial pain, as lower tax revenues come in, due to higher unemployment and lower corporate revenues.

[jackolover]

Are you saying that even if a person has good credit and a job, that unless they also have something for collateral, they should not be able to get a home loan?

That's the way it used to run in the 50's and 60's. I couldn't get a loan and had chance of getting one in the foreseeable future when I was a youngen'. So from my viewpoint, the banks and money lenders shouldn't give out loans without security, and that's the way it's headed from now on, as well. How else are the lenders going to feel secure if they don't apply conservative rules? How else are lenders going to regain confidence from the public if they don't show they have at least a semblance of sound policy? Whose going to waste their money on an organisation that throws there money away? There will have to be a lot of conservative policy laid down for this to come out of Recession.

[fly on the wall]

Also, every level of government will be feeling financial pain, as lower tax revenues come in, due to higher unemployment and lower corporate revenues.

I heard today that state and local government employees are being laid off in Maryland where I live. I've heard this is happening everywhere. It's odd how everything changed so fast.

[fly on the wall]

They will be gone if people can't afford them, There is the shcking fact to consider that they are not necessities and they are a vulnerable business being such a niche market to begin with.

Comics are NOT NECESSITIES? Such comments were banning offenses back in my day.

I don't think the looming Depression will bode well for comic books but let us not forget that the Depression spawned pure escapist entertainment and that comic books themselves came into being during the Great Depression.

On the other hand we are already in an era of pure escapism for entertainment, this time how would we know the difference?

[darkhanamaru]

Comics are NOT NECESSITIES? Such comments were banning offenses back in my day.

I don't think the looming Depression will bode well for comic books but let us not forget that the Depression spawned pure escapist entertainment and that comic books themselves came into being during the Great Depression.

On the other hand we are already in an era of pure escapism for entertainment, this time how would we know the difference?

Actually a lot of the entertainment businesses i work with are projecting uptick due to that phenomenon i needing relatively cheap in-home escapist entertainment versus going out. However, I would maintain comics due to the short time taken to consume them may not be seen as bang for the buck versus that game that takes days to play. I think comics are and will suffer in favor of cheap content online and used books.

[jackolover]

Comics are NOT NECESSITIES? Such comments were banning offenses back in my day.

I don't think the looming Depression will bode well for comic books but let us not forget that the Depression spawned pure escapist entertainment and that comic books themselves came into being during the Great Depression.

On the other hand we are already in an era of pure escapism for entertainment, this time how would we know the difference?

I spoke to my comic shop manager and he said things like this bring droves of people into his shop because people can't afford to buy the expensive luxury items, that comics become the affordable entertainment.

Also, I don't think we will be seeing any where near the volume of Marvel movies being made in future if loans become a problem.

[darkhanamaru]

I spoke to my comic shop manager and he said things like this bring droves of people into his shop because people can't afford to buy the expensive luxury items, that comics become the affordable entertainment.

Also, I don't think we will be seeing any where near the volume of Marvel movies being made in future if loans become a problem.

Well Marvel's finance vehicle for its movies through 2012 or thereabouts was put together back in 2006 by Merrill Lynch. I am sure Bank of America will continue to manage that loan as the vehicle was made to be repaid by 2009 through movie profits from what I understand. They should be ok.

[mikekerr3]

Comics are NOT NECESSITIES? Such comments were banning offenses back in my day.

I don't think the looming Depression will bode well for comic books but let us not forget that the Depression spawned pure escapist entertainment and that comic books themselves came into being during the Great Depression.

On the other hand we are already in an era of pure escapism for entertainment, this time how would we know the difference?

Comics were a very cost effective type of entertainment then, Now they are most definitely not. Comics have priced thenselves into a Niche Market and the distibution model they follow reinforces this.

I think that Cost for anout of time spent will become increasingly important, and @.99 comic books will take a huge hit. Compare the cost per minute of reading a comic and going to a flick and the Comic loses horribly. They lose to Manga and Videogames and most other media also. Something has to give or the media will be gutted.

[cactusmaac]

Trades should do allright.

[K'Nort]

Are you saying that even if a person has good credit and a job, that unless they also have something for collateral, they should not be able to get a home loan?

Absolutely.

[mikekerr3]

Absolutely.

Until recently the only way to get a house without a down payment was though a VA government guaranteed load. Everyone else had to pony up a down payment.

[LtMarvel]

The exceptionally sad side of the Bush economy (http://news.yahoo.com/s/ap/20081008/ap_on_re_us/safe_haven).

[Winslow]

Buyout or not, it just doesn't make sense to build vehicles in the U.S. these days, because union labor and executive greed have combined to make the prices unreasonable. . . .

Nah. Contrary to popular belief, U.S. union labor is among the most efficient in the world. So even though you pay more per hour, the production makes union labor in the U.S. competitive (at least that's what my brothers in the Auto business told me). I DO know it's true for construction.

American auto makers got killed by making gas-guzzlers when gas was cheap. When gas prices jumped, their sales of SUVs plummetted.

Sounds like 1972 all over again.

I don't think it has to do with unions, more with stupid short term planning.

[o1pickleboy]

Nah. Contrary to popular belief, U.S. union labor is among the most efficient in the world. So even though you pay more per hour, the production makes union labor in the U.S. competitive (at least that's what my brothers in the Auto business told me). I DO know it's true for construction.

American auto makers got killed by making gas-guzzlers when gas was cheap. When gas prices jumped, their sales of SUVs plummetted.

Sounds like 1972 all over again.

I don't think it has to do with unions, more with stupid short term planning.



Just to add in. The biggest advanage us stateside(canada too) auto workers have is quality. It is normal in the Mexico plants to sort product 3 or 4 times before sending it out the door. Normally the sort takes about the same amount of time as it does to make it. So basically it take at least 3 times the labor to make the same part as stateside.

[J. Robb]

Hedge fund manager slams ‘idiot’ bankers (http://www.ft.com/cms/s/0/b0a40c72-9c83-11dd-a42e-000077b07658,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html)

Pretty amusing story, check out the link to Andrew Lahde's full letter.
I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.

[cactusmaac]

Nah. Contrary to popular belief, U.S. union labor is among the most efficient in the world. So even though you pay more per hour, the production makes union labor in the U.S. competitive (at least that's what my brothers in the Auto business told me). I DO know it's true for construction.

American auto makers got killed by making gas-guzzlers when gas was cheap. When gas prices jumped, their sales of SUVs plummetted.

Sounds like 1972 all over again.

I don't think it has to do with unions, more with stupid short term planning.

More efficient than the Japanese and Germans?

[mikekerr3]

More efficient than the Japanese and Germans?

Yep, They work more hour, produce more per hour worked.

[jackolover]

Hedge fund manager slams ‘idiot’ bankers (http://www.ft.com/cms/s/0/b0a40c72-9c83-11dd-a42e-000077b07658,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html)

Pretty amusing story, check out the link to Andrew Lahde's full letter.
Quote:
I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.



It would be funny if the US Aristocracy, (if that in fact exists), has a blase' approach to responsibility, and was the cause of this. I imagine there would be a backlash from the intelligencia to any suggestion that the American system of education had this kind of flaw.

I'm more inclined to accept that the current crisis was caused by a simple relaxing of fiscal integrity, because of the glut of wealth being bandied about.

[Winslow]

More efficient than the Japanese and Germans?

Yes.

Of course they don't get a month of paid vacation either. Kinda cuts into that productivity calculation.

[Shellhead]

So if unions aren't the problem, why did Chrysler need a big bailout in 1979? Why did it get taken over by Daimler in 1998? Why is GM desperately looking to get bought out, or else run out of cash next year? Why is Ford telling stockholders that they have about two years of cash left? Why are dealerships now offering six-year financing on new American cars? How come foreign car manufacturers remain competitive in the U.S. if their labor is so inefficient? Do U.S. automakers export many vehicles?

[LtMarvel]

Labor is an expense, however, management has always been the problem for the big three. In the 70s, they were making gas guzzlers. In the 00s, they were making gas guzzlers. GM famously had its electric car line crushed in the 90s.

[Shellhead]

Labor is an expense, however, management has always been the problem for the big three. In the 70s, they were making gas guzzlers. In the 00s, they were making gas guzzlers. GM famously had its electric car line crushed in the 90s.

Bad management is a valid point. However, look at imports and exports. U.S. automakers aren't exporting much, because their vehicles can't compete in most foreign markets. At the same time, Americans buy about 50% of their vehicles from Asian and European automakers. Why? Because they make better cars.

[Titan76]

Bad management is a valid point. However, look at imports and exports. U.S. automakers aren't exporting much, because their vehicles can't compete in most foreign markets. At the same time, Americans buy about 50% of their vehicles from Asian and European automakers. Why? Because they make smaller cars.
Fixed it for you.

Before gas prices skyrocketed the best selling vehicles for the big 3 in the US were SUVs and Trucks. Now that gas is over $3 smaller cars with better fuel mileage is want people want now and is what the Asian and European automakers have had for some time now and is something Detroit doesn't have. Also Healthcare is another main reason why the big 3 have been losing money. Healthcare cost are out of control and the automakers just can't afford it anymore. Here's an article (http://www.workinglife.org/wiki/The+Auto+Industry+Crisis+is+a+Health+Care+Crisis+( April+15,+2005)) that talks about how much Health cost have effected GM and Ford. Note its 3 years old but not a whole lot has change for the auto industry in terms of cost and lost since then.

[Shellhead]

American automakers were losing market share long before the recent surge in oil prices. And that article supports my point about unions. Every American employer is facing the same high healthcare costs, but most of them have the flexibility to make workers cover more of the costs. And few employers ouside the auto industry still offer traditional retirement plans.

[darkhanamaru]

Nah. Contrary to popular belief, U.S. union labor is among the most efficient in the world. So even though you pay more per hour, the production makes union labor in the U.S. competitive (at least that's what my brothers in the Auto business told me). I DO know it's true for construction.


This is true for a lot of industries across the US

here is a report from the ilo on this

http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Press_releases/lang--en/WCMS_083976/index.htm

[mikekerr3]

So if unions aren't the problem, why did Chrysler need a big bailout in 1979? Why did it get taken over by Daimler in 1998? Why is GM desperately looking to get bought out, or else run out of cash next year? Why is Ford telling stockholders that they have about two years of cash left? Why are dealerships now offering six-year financing on new American cars? How come foreign car manufacturers remain competitive in the U.S. if their labor is so inefficient? Do U.S. automakers export many vehicles?

Most of the imports not only don't pay taxes on what they sell here they get government help to do so.

The biggest problem is that the Cars that Detroit puts out are not what people want to buy, please show me a GM card as well made and finished as a Honda Civic that costs under 40 grand.

If you want to import a ca into Japan, the costs are extreme, hight tariffs, a special inspection process that can double the cost of the vehicle amd a hostile goverment . We don't know how well US cars would be doing on a level playing field since one does not exist in the real world.

And if you haven't noticed the imports are doing pretty badly too, Toyota is taking it in the shorts lately.

[darkhanamaru]

Bad management is a valid point. However, look at imports and exports. U.S. automakers aren't exporting much, because their vehicles can't compete in most foreign markets. At the same time, Americans buy about 50% of their vehicles from Asian and European automakers. Why? Because they make better cars.

You do realize that American workers in the South makes those cars for Asian and European automakers for the American market? They aren't beholden to the same union contracts as the big 3 so they hire cheaply in the south. Not saying I agree with this but it is a lot cheaper to use American labor there than even in Japan. Parts are made in Mexico and shipped up for assembly. Personally I think the Big three's problem is more that U.S. Management did not anticipate market shifts very well except for the SUV and they didn't prepare well for the shifts away from those model though they had the data that it was coming.

[dupont2005]

So if unions aren't the problem, why did Chrysler need a big bailout in 1979? Why did it get taken over by Daimler in 1998? Why is GM desperately looking to get bought out, or else run out of cash next year? Why is Ford telling stockholders that they have about two years of cash left? Why are dealerships now offering six-year financing on new American cars? How come foreign car manufacturers remain competitive in the U.S. if their labor is so inefficient? Do U.S. automakers export many vehicles?

why does my cadillac have to go to the shop 6 times a year and my mothers nissan has been running for 10 years without a single problem? why did my cadillac cost close to double what her nissan costs?

[o1pickleboy]

You do realize that American workers in the South makes those cars for Asian and European automakers for the American market? They aren't beholden to the same union contracts as the big 3 so they hire cheaply in the south. Not saying I agree with this but it is a lot cheaper to use American labor there than even in Japan. Parts are made in Mexico and shipped up for assembly. Personally I think the Big three's problem is more that U.S. Management did not anticipate market shifts very well except for the SUV and they didn't prepare well for the shifts away from those model though they had the data that it was coming.


Actually the wages in most of the Japan automakers stateside plants are equal to the big three. What makes the major price different in the autos is several factors.

1.) as mentioned above. The health care costs for UAW labor.(which as of this last contract are a fixed cost and are now the UAW responsibility.

2.) Currency manipulation. Jap automakers using the currency different to make money.( so they can sell a vehicle with little to no profit)

3.) Management: the management model for most of the jap corps are 1 manager for every 100 employees. The U.S average is 1 manager for every 10 employees(When I got laid off from my plant in Sep. the average was 1 manager for every 4 employees)

4.) Components: The Jap auto use less than 25 different types of components(such as mirror, door handles, etc.) The big three are in hundreds with different components for anything and everything. ( many and so identical that you can't tell the difference without special gages.)

As for quality, that has been improving greatly in the recent years, but with the natural arrogance of the big three. They did nothing about quality for almost two decades. Only when the Jap company started kicking there ass did they wake up.

[Paradox]

dupont2005 gets to specifics:

why does my cadillac have to go to the shop 6 times a year and my mothers nissan has been running for 10 years without a single problem?

Because Caddies have ALWAYS been bullshit mechanically.

why did my cadillac cost close to double what her nissan costs?

Because it's a "luxury" car. Really very apples and oranges here.

[dupont2005]

Because Caddies have ALWAYS been bullshit mechanically.



Because it's a "luxury" car. Really very apples and oranges here.

yeah, but nissan does make a nice car in my cadillacs price range that judging from my moms sentra, would have had none of the problems i have had. not to mention probably be more economical, even though that was not a consideration when i bought it. i dont think there is an american made car with the quality and reliability that nissan puts out. thats why american auto manufacturers are in trouble, not because of unions. when japan was making sensible cars for a sensible price, american auto manufacturers were trying to stuff ever bigger flatscreens into ever bigger suv's. if the economy were better, and gas were cheaper, it would have been a good gamble. things just didn't turn out that way

[mikekerr3]

The DOW dropped below 8000 today and there looks to be no floor soom for the proverbial "soft landing"

The Treasury and the Fed have changed plans wasting a lot of time that they said we did not have.


the current plan leave the banking system run by the same managers and risk evaluators who made the hole so deep.

We had 1% deflation last month.

The Largest industry in the US is teetering on the edge of bankruptcy, and othing is being done to fix it, or even ease damage that that will cause, With the speech making and such mostly along party lines. Who really knows what will dominoe with it?

We have an incumbent president who does not seen to care much and never was all that competent to begin with running thing for another two months.

People are expecting the guy. not in charge yet. to fix things even though he legaly and ethically can't yet.

Am I the only one who is pushing past nervous to the first edge of fear? I really don't want my Sons telling thier kids interminably about the"Great Depression" (it was bad enough for me to go though that).

[o1pickleboy]

I'm not worried to much. When we starting seeing huge increases in the suicide rates in for stockbrokers and the upper upper class then i worry. Outside of that it just a another recession. One that I have been living in for a decade now, So come in and enjoy your spam.

[Loren]

Yet another sign of the economic downturn:

Rich Cut Back on Payments to Mistresses (http://blogs.wsj.com/wealth/2008/11/18/rich-cut-back-on-payments-to-mistresses/)

[Winslow]

I'm not worried to much. When we starting seeing huge increases in the suicide rates in for stockbrokers and the upper upper class then i worry. Outside of that it just a another recession. One that I have been living in for a decade now, So come in and enjoy your spam.

True, Michigan's economy has been sucking for a long time now.

[Winslow]

Am I the only one who is pushing past nervous to the first edge of fear? I really don't want my Sons telling thier kids interminably about the"Great Depression" (it was bad enough for me to go though that).

You went through the great Depression? How old are you? or did I read that wrong.

My Dad grew up through it. His childhood memories are all positive.

I'm not really in fear, nor am I anxious. Then again, I have no debt and have enough savings to pay off my mortgage if the bank made a demand.

My 401K has been cut in half, but I have 20-25 years to let it recover.

[o1pickleboy]

True, Michigan's economy has been sucking for a long time now.



The funny thing is our economy has been failing because we were a one industry state. With that industry failing and being outsourced I understand why us in Michigan are in the boat we are in, but up until recentcy we were still doing better than Mississippi. I just wonder what their problem is?

[Paradox]

Winslow needs an interp:

You went through the great Depression? How old are you? or did I read that wrong.

I think he's saying he doesn't want his grandkids to have to listen to their parents about a depression the way he had to hear HIS dad (Dad being the one in the depression).

[Fenris]

Some numbers (http://www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks/) on the bailout:

If we add in the Citi bailout, the total cost now exceeds $4.6165 trillion dollars. People have a hard time conceptualizing very large numbers, so let’s give this some context. The current Credit Crisis bailout is now the largest outlay In American history.

Jim Bianco of Bianco Research crunched the inflation adjusted numbers. The bailout has cost more than all of these big budget government expenditures – combined:

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion

At what point does it become a better deal to just let the economy crash? (Or, rather, a less-bad deal?)

õ
Or does it ever reach that point!

[Fenris]

Heh. Atlas Shrugged, Updated (http://mcsweeneys.net/2008/11/20tucker.html):

"Damn it, Dagny! I need the government to get out of the way and let me do my job!"

She sat across the desk from him. She appeared casual but confident, a slim body with rounded shoulders like an exquisitely engineered truss. How he hated his debased need for her, he who loathed self-sacrifice but would give up everything he valued to get in her pants ... Did she know?

"I heard the thugs in Washington were trying to take your Rearden metal at the point of a gun," she said. "Don't let them, Hank. With your advanced alloy and my high-tech railroad, we'll revitalize our country's failing infrastructure and make big, virtuous profits."

"Oh, no, I got out of that suckers' game. I now run my own hedge-fund firm, Rearden Capital Management."

"What?"

õ
Poor Ayn, so parodable!

[Shellhead]

Fenris,

That's an interesting way of putting things in perspective.

I just read this article:

http://articles.moneycentral.msn.com/Investing/Forbes/washingtons-6-point-3-trillion-dollar-bailout.aspx

...which claims that the Feds have now promised an estimated $6.3 trillion in bailout money to various industries. That's nine times as much as the initial bailout talked about a couple of months ago.

Trying to piece together the numbers:

Bailout to the banks: $700 billion

Federal Reserve commitment to buy asset-based securities: $200 billion

Federal Reserve commitment to buy direct obligations and mortgage-backed securities of govt entities like Freddie Mac and Fannie Mae: $600 billion

Short-term loans from Federal Reserve to "primary dealers" through their "emergency discount window": $1.1 trillion

Short-term transactions through the Fed's "term auction facility": $1.9 trillion

Bailout of Bear Stearns: $29 billion

Bailout of American International Group: $112.5 billion

Bailout for CitiGroup: $240 billion

FDIC is guaranteeing "senior" unsecured bank debt: $1.5 trillion

That all adds up to slightly more than $6.3 trillion, but close enough for government work. The important thing is that we all understand that Uncle Sam has two ways to pay for all this, and either way, we lose. Taxes can go up. Way up. And that will in turn put a damper on the economy, leaving consumers and businesses even less capable of the spending that might rescue this economy. The other option is to just print more money, which would devalue our currency and make the price of everything go up. Again, consumers and businesses will both face reduced spending power, and recovery moves farther out of sight.

[Gary_B]

...which claims that the Feds have now promised an estimated $6.3 trillion in bailout money to various industries. That's nine times as much as the initial bailout talked about a couple of months ago.

I was struggling to understand what a trillion of anything looks like and found this tool called the MegaPenny Project (http://www.kokogiak.com/megapenny/default.asp).

http://www.kokogiak.com/megapenny/trillion_bldgs_A.jpg

The cube is a stack of a trillion pennies.

[Shellhead]

It's very disappointing that the current recession has only recently been officially acknowledged by the Federal Reserve, and they have retconned it back to the start of 2008. A recession is defined as two consecutive calendar quarters of shrinking Gross Domestic Product. So we are supposed to believe that the government has suddenly figured out that the economy entered a recession during the first six months of 2008? Bullshit. They knew that by the end of July, but tried to cover it up. Investors are so sensitive, they are easily spooked by unpleasant truths.

[Calybos]

""Deep in their souls, stock traders realize they are participating in an enormous hoax that could collapse at any moment, so any event, no matter how trivial, causes them to panic."
--Dave Barry, Bad Habits--

http://images.salon.com/comics/tomo/1997/11/src/24tomo.gif

[o1pickleboy]

It's very disappointing that the current recession has only recently been officially acknowledged by the Federal Reserve, and they have retconned it back to the start of 2008. A recession is defined as two consecutive calendar quarters of shrinking Gross Domestic Product. So we are supposed to believe that the government has suddenly figured out that the economy entered a recession during the first six months of 2008? Bullshit. They knew that by the end of July, but tried to cover it up. Investors are so sensitive, they are easily spooked by unpleasant truths.

The only time Investors show balls is when asking for money. The only time the government does is during the campaign and after the election

[sherlockbones]

I'm not worried to much. When we starting seeing huge increases in the suicide rates in for stockbrokers and the upper upper class then i worry. Outside of that it just a another recession. One that I have been living in for a decade now, So come in and enjoy your spam.

when i found this headline your post was the first thing that came to my mind.
it is not a huge increase
but nevertheless this guy surely would not have been dependend on the welfare system either.

http://edition.cnn.com/2009/WORLD/europe/01/06/germany.billionaire/index.html

[Justin D.]

I was struggling to understand what a trillion of anything looks like and found this tool called the MegaPenny Project (http://www.kokogiak.com/megapenny/default.asp).

http://www.kokogiak.com/megapenny/trillion_bldgs_A.jpg

The cube is a stack of a trillion pennies.

Oddest thing about that page for me? It made me truly realize how awesomely big Mt. Everest is.

http://www.kokogiak.com/megapenny/quintillion_bldgs_A.jpg

Those little things in the corner are the Sears Tower and other buildings in your picture, now dwarfed by a 27,300-foot high cube of pennies. Mt. Everest is 1,700 feet taller than that cube.