I agree that the government must do something, but does it have to be something so big and so quickly? This mess took years to get into and will take a long time to get out of. I don’t think we’re fixing much of anything in one week. I dread looking back a year from now and wondering what we were thinking, but I get this sneaking suspicion that this is exactly what will happen. I hope not.

Lastly, I don’t think this should be politicized. This isn’t the result of “failed Bush policies” – this started long ago and suspending a campaign won’t really do too much. Let’s just get this fix started and go back to arguing the war, taxes, immigration, etc.

Anybody? Barter? Yes? Will trade wine for your olive oil.

OH wait, on my dream land, I have olive trees.

Silly me.

But, of course, everything links to everything, and someone else’s inability to get or maintain proper credit will end up touching my life as well. I do wish I knew more about it – luckily pantsworld’s full of such smarties!

I think Jezebel might have missed the point slightly. They forgot an all-important category of male romantic lead (and the one epitomized by one Mr. Dobbler) – that of “charmingly unhinged stalker.” Seriously, if someone showed up to my house after I’d asked them repeatedly not to speak to me? In the middle of the damn morning? Actually, this HAS happened, several times, and at no point was it sweet or charming or romantic. More like creepy, stalkerish and affection-killing. Yuck.

also, I will look for the article on how the Fed already injected some hundreds of billions once they saw that the house had voted down the original bailout plan— but for now i need to go tutor.

everyone (here, in the media, our legislators) talks about the crisis without mentioning the most extreme aspect of all of this.

WAKE UP. do not buy into the silly argument about low income housing for poor people- or predatory lending blah blah blah

thats the argument that lets people fall into the useless republican/democrat conservative/liberal bullshit

i know i know thats probably mostly true- people got loans they couldnt pay back and lenders pushed loans on them, yes clinton pushed that agenda back in 99, blah blah

its all true.

but its CHUMP CHANGE.

derivatives. start here: http://en.wikipedia.org/wiki/Derivative_(finance)

now, this “tool” is basically a way to move risk around and around, using leverage to make lots of money from very little changes in value of real assets.

so what these huge firms have done (think: ENRON) is built up huge amounts of wealth by betting on the values of existing and future assets, but they only do this by pushing the risk further and further into the future-

now if its unintuitive or seems really complicated, you’re smart- it is. (intentionally) now the real scary part is how huge and pervasive this has become

*
U.S. annual gross domestic product is about $15 trillion
*
U.S. money supply is also about $15 trillion
*
Current proposed U.S. federal budget is $3 trillion
*
U.S. government’s maximum legal debt is $9 trillion
*
U.S. mutual fund companies manage about $12 trillion
*
World’s GDPs for all nations is approximately $50 trillion
*
Unfunded Social Security and Medicare benefits $50 trillion to $65 trillion
*
Total value of the world’s real estate is estimated at about $75 trillion
*
Total value of world’s stock and bond markets is more than $100 trillion
*
BIS valuation of world’s derivatives back in 2002 was about $100 trillion
*
BIS 2007 valuation of the world’s derivatives is now $516 trillion

$516 trillion
$516 trillion
$516 trillion
$516 trillion

IN SIX YEARS!!!!! since 2002 derivative trading has gone from ~$100 trillion to $516 trillion!!!

http://www.marketwatch.com/news/story/derivatives-new-ticking-time-bomb/story.aspx?guid={B9E54A5D-4796-4D0D-AC9E-D9124B59D436}

http://www.ft.com/cms/s/0/73a3d4d8-8eff-11dd-946c-0000779fd18c.html?nclick_check=1

This article is about derivatives from JUST credit markets:

http://money.cnn.com/2008/09/30/magazines/fortune/varchaver_derivatives_short.fortune/?postversion=2008093012

now, i really have to just say that unless the national debate can include discussions on this, the bubble is going to burst and people are not going to know what hit them

the reason i hate the bailout is because it just gives the impression that its going to fix or change things– it wont, it’ll just let the companies keep doing this stuff for some period of time before it comes crashing down again.

oh and by the way– lets not pretend like another bailout didnt already happen…

the fed has been extending itself

This problem has been in the making for quite a while and I think it goes back to the Clinton administration. Clinton wanted the “American Dream” to be available for everyone and pushed banks to reduce lending standards to make it easier for minorities and lower income families to own a home (and I am not blaming Clinton for all this, banks should have been smarter. And I do like some things Clinton did…he had a great budget and got rid of inheritance tax). Anyway, an article in the NYT from 1999 predicted this fall, specifically for Fanny Mae. Bad loans were given to eager Americans who wanted to own their own homes. Fast forward a few years and the banks that were lending to people who didn’t have adequate credit were caught holding the bag. Banks are only required to keep a certain % of money in reserves, but when they are responsible for bad loans, that % keeps increasing. It got to the point where they could not maintain that % and it made the bubble pop. People got in over their heads and banks had a m-e-s-s.

The bailout needs to happen, although I don’t agree with the entire plan. The fact is that our economy ONLY works when people spend money and the bailout will allow money to flow again. If people are not spending, then we enter a huge depression. It takes a lot longer to feel a depression/recession in 2008 because the credit we do have allows money to still flow. Think about it: in the early 80s, it hit faster because credit was not a prevalent, and in the 30s it hit super fast because credit was non-existent. My prediction is that the credit card companies are going to be the next to fall, merge and go under. Just wait. Then we’ll have even a bigger mess. Bottom line, when money stops flowing, our economy tanks and it trickles down to virtually every job. (I do think education is fairly sheltered).

These are the times where the rich get richer and the average Joe loses everything. The rich continue to invest in a weak stock market because they know that the market will rebound eventually and they were able to buy more at a lower value. Meanwhile, your average American is buying groceries on credit to feed their children.

If you’re worried about your money, move to a smaller bank. These banks don’t fund mortgages (or they approve you and sell the mortgage to someone else) and are actually doing OK.