bailouts

[GoldenBoy812]

s.Investment is not about jumping ship when times get hard. Granted there are times you do this and it's correct to do so, but majority of the time the right thing to do is to hold onto your investments; or sell them and rebuy the stock after it's stable and bottomed out.

The problem is, credit is as tight as a virgins ass. Many new/ used car/ motorcycle/ RV/ boat/ (whatever requires credit to finance) dealers will have to close shop, that will result in high rates of unemployment. As companies crash, the desire to get out while you still have some value persists. People sell things when they need a means of exchange. When you are unemployed, you then will dip into your retirement money (therefore participating in the market correction).

If i have the money to lose and i am in it for the long term, only going to sell if i believe its going to be bad. Credit has to be freed up or people will lose jobs, im talking millions of jobs will be lost by the years end.

Many investment guru's would say the same, but to each his own. Really if your portfolio diversified then situations like this are not a real issue.

Everybody is losing money. The average long term investor is down between 10% and 20% this year (IMHO). Its really a shame.

[dragonrider]

The problem is, credit is as tight as a virgins ass. Many new/ used car/ motorcycle/ RV/ boat/ (whatever requires credit to finance) dealers will have to close shop, that will result in high rates of unemployment. As companies crash, the desire to get out while you still have some value persists. People sell things when they need a means of exchange. When you are unemployed, you then will dip into your retirement money (therefore participating in the market correction).

If i have the money to lose and i am in it for the long term, only going to sell if i believe its going to be bad. Credit has to be freed up or people will lose jobs, im talking millions of jobs will be lost by the years end.

The reality of this started to come home for me in the last few months. As I mentioned earlier in the thread, I started looking at the possibility of buying some rental units in the last few months. Prices are way down, so it seems a better time to buy than in the past.

The problem is the financing. Loan terms have gotten worse for the past few months, and now I'm not even sure if I can find ANY kind of loan. My credit union has removed ALL information regarding real estate loan terms and rates from its website for the past two weeks. I have excellent credit and plenty of equity to draw on, but the financing is still not there.

I started to understand the reason these prices are so low is not because there are not willing buyers at these prices --- there just isn't any credit for those who do want to step up and buy. If we don't get some financing available, prices will continue to drop until we get to the point where people with lots of cash on the sidelines can buy without financing. Those people will make a fortune in the long term, but everyone else will suffer.

Everybody is losing money. The average long term investor is down between 10% and 20% this year (IMHO). Its really a shame.

This is true for me. My long-term investments in 401k and IRA are way off year-to-date. WAY OFF!!!

[painretreat]

:jointsmileragonrider; these are some good times for bargains. Last time I saw it in the housing mkt was in '94 and I managed to take a little advantage of that. Now, again is the time, soon. Have been watching it. Frankly, the best time to buy investment homes is when there is 'blood in the streets' so to speak! As far as gold, I expect it may go as high as $1500. or more an ounce. Buying in blocks instead of coins is better and easier to trade. If you want coins, try Canadian (pure gold)!! The '80's was the last really good time I recall it was a fairly good bargain. It is all relative though!

I believe the best investments in homes will either be those extremely large house's (if built in a town with potential of a greater population) or simple duplex's. Because, something has to be done with the 3500-4,000 sq. ft. homes sitting empty. Would make nice retirement centers for the baby boomers or simple split up apartments (which is what has happend in Los Angeles over the years!). But, you must really look around at the potential of the city. In L.A. county, parts of Riverside and San Berdo are pretty ripe for High Density Housing!

These are times to really make some good bargains, only in the stock market if you have a Phd in it. I've lost too much in it over the years and do not care to mess with it again.

Problem with gold, it is hard to keep, if you have enough :twocents:quantity, the safe deposit box costs about what it would go up in value over decades! Just depends on where your knowledge on investing lies. Use you best skills and put them forward.

I'd like to know what all this translates to in the price of mmj? any clues? Oh I hear you, buy a 4,000 sq. ft. home and become a caregiver or collective! It is being done! Or, go to the redwoods and buy some secluded parcel to go outside on??

These bailouts, etc. It did not happen during the great depression and I am guessing this is a bandaid :sadcrying to avoid the 'great depression' until after the election!!! :twocents::twocents:

And when all else fails: :joint1::bigsmoke: go to cannacom and be entertained and educated at the same time!!! Thank U cannacom for being here! pr :jointsmile:

It won't matter how it shakes out, I will be unhappy with what has been done for large corporations that is not being done for those that need Soc. Sec. disability or SSI. This means, more denials for those that have been waiting years. In fact, that ought to be a thread to start right now and keep track of! A lot of people on this site have been fighting SS for many years and still do not have it. think they stand a snowballs chance in hell, now? People have filed bankruptcy for years and have had more consequence's to pay in long term than those companies! I am pissed, bailing out an insurance Co. Those S.O.B.'s!!! It isn't fair. They need to find where the money went and go get it back! Even if t is a few Islands in the South Pacific, Fiji and all over he world! Plus, their banks off shore! I am a very unhappy camper with our politicians, today! I realize, they did not do this themselves, but if i could see it coming, they should have! In fact, we ought to take a poll of how many people here saw something bad coming when you could buy a house: NO $ down, no principal payments and wait, interest rates will go way up and then you'll need to make a full payment with todays' interest rates, including interest, principal, insurance and tax every month! No, we are far from out of the woods.

My know it all neighbor down the street feels, the worst is over, and that was before the bailout! Wonder what he thinks today, other than avoid me, cause 'I told him so!'

Well, as long as my supply of mmj lasts until my next payday, I'll be fine for now-or spend what I have on mmj! Right now we need to look at our finance's like a boat with a hole in it! Before you take your finger out of the hole and dole out your money for anything, THINK, how full of water will your boat get, before it sinks. Do you need to take your finger out of the hole to drain your wallet and fill the boat? If not, keep your finger in the hole and find a better way to stay dry without cleaning out your wallet!

I must shut up, this whole topic has really gotten my blood pressure up to readable levels now! Our Gov't has gone to far to protect big business. If big business was let go, we might get back to the good ole days of Mom and Pop business's with a chance of making it and supporting a family, again!!! That has been a long time. If we go back to personally knowing our bankers and people we do business with, people would become more responsible in spending. I would hope. It is questionable with a few of the new breed of the self righteous, self centered spoiled ones that have no clue of what dirt is, except FF for a growing medium!

O.K., sorry guys, I'll get off my soapbox, again! Cause this one gets the hair on the back of my neck to stand up! And I am not looking at a wild cat right now! Thanx for your patience! Pr :hippy:

Crap, the news just said that value of homes in 'Valley' Plummet! That would be outside of Los Angeles. Good, the closer to L.A. the better. Wouldn't mind having a little ghetto house in L.A. close to the theatre, ball games and where there are events every week-end! If the celebs would move out, it could be a fun town. So, much to do! But, I am not sure I can be civilized enough to live in a city anymore! Tooooo long in the country! bye now :jointsmile: Pr

[GoldenBoy812]

Being a business major doesn't make me an investor, but it sure helps me understand things better and I don't buy the free trade and free market (with or without regulation) promise anymore. when I'm a millionaire I may partially invest in stocks but it will certainly not be my first choice.

You have to remember, Keynesian economic/ financial infrastructure has intertwined us together. As banks fail, so go the economies they represent.

its not about "jumping" ships. I wouldn't get on this ship in the first place when it has no "lifeboats" sure it may be the most luxurious ship in the economy when its maintained correctly, but still i wouldn't wanna ride it when there are safer ways.

Its funny you say that. Part of the problem was created when smart investors did something that was both genius and kinda sad. These "smart" investors bought up huge sums of these securities and bought insurance (a lifeboat) on the instance that the bundled security was to default. If it did, the holder of the CDO would collect a "claim" just like a homeowner who's house burnt down. AIG did not have the money to pay these massive CDO's and other investments. Commonly, this is called a "credit default swap" that is about to be completely regulated (limiting leverage ratio's to under 15:1) very soon.

Secondly, the "Gov" is going to provide a floor now. That way, people will be less likely to pull their money out due to fear.

there are far more secure ways for investment, ways u can have more control over and take less risk. Gold, land, owning small businesses, owning rental property, offshore investments in tourist resorts. China & India offer great deals for foreign investors, why? cuz they are developing countries and can afford paying much higher interest rates despite the fact that there is no such a thing like FDIC there.

Only gold will hold its utility. The rest are independent variables in the land of Keynes. Foreign banks will begin to fail also, setting up a world wide recession if credit is not freed. Chinese and Indian goods will no longer be demanded, causing them to drop prices resulting in deflation. This deflation will spill over into oil producing countries, and supply will soon be restricted to offset fixed cost already outstanding (buying land, discovering oil, buying equipment all at previously higher prices). The only thing that slightly hedged will be consumer staples (razors, toothpaste, etc...) as well as renewable energy.

Pickens: Natural gas, Warren Buffett could ease nation's woes - CNN.com
see, the more money and capital u have, the better u can position yourself for stock market and perhaps take short-term hits.
But I'm afraid if we don't change some policies around, we ought to expect another major crash in future which scares the hell out of me.
and some1 like him, probably has investments in at least 10-20 different fields from stocks to land to whatever u can think of

I love T-Boon:jointsmile:

but u r correct people gamble and do make money, its just the matter of how much of a hit u can take and stay good. Some investors know what they are doing and even they have to cope with hard times, and some have no idea and get hit hard. I don't like 1-2 years of paranoia over money every 10-15 years, and we have had this trend happen eversince great depression

There were depressions during the 19th century, but those were based on fraud, as well as extortion and government intervention... Gold, yes gold is the only thing that will hold value. As conditions worsen and hyperinflation or hyperdeflation persist, people will being buying up supplies of bullion. You could see gold prices at $100,000 per ounce in such a situation. But seriously, if credit is not freed up, this very well can happen. :beatdeadhorse:

remember that no1 can guarantee how bad or long each downturn will be or take. and thus i find it quite risky to have your money in a market that can go down with just 1 bad statement by 1 famous man. its psychologically a very paranoid market, it goes up this way and it goes down this very same way.

It will go down under paranoia, but if its only hot air, and of little fundamental significance, it will go up shortly and people will make a killing. Im not going to beat the dead horse again:smokin:

[flyingimam]

GoldenBoy812

Nice post and info. u sorta corrected AND completed my post thnx

and great point about AIG and insurance. that is what i failed to point out.

But for now, until i have a good sum of money, im gonna stick with Gold, silver, and platinum :thumbsup:

with a shotgun on my wall and these stuff under my mattress ill be good

no but seriously, Diahashi also had a good point which i actually agree with: Diversification of portfolio matters alot, but again I would not step into stock market at all until i have a good amount of capital to invest as just a portion of my net worth.

OR

if i have small amount of cash to invest, I will become a fulltime trader following market's every move to preserve my investment the best way i can.

but my point was: MY LIFESTYLE SHALL NEVER DEPEND ON THIS MARKET. so in times like this that tend to happen too often imo, i wont have much to worry about. the whole point of living large is to live a happy good life, not to worry about making or losing money in my philosophy.

i still can't believe people use borrowed money in the stock market... same thing that led to 1929 crash. stock market slowed down sharply and no1 was making anymore cash off of their borrowed investment... resulting in non-payment to banks and collapse of financial sector which blew back again to stock market bringing it to a complete halt and making a full loop.

an old article... man i just saw this and im now scared shitless!
NY Times: Stock Loans Are No Place for Secrecy

The S.E.C., which also filed civil fraud allegations, says the actions brought in $12 million for the traders. This is a $700 billion market, according to calculations by Vodia Group, a research firm, but one that is so hidden from view that this suspected fraud could go on for more than five years without being detected.

$700 billion bail out plan rings a bell?
Threats and fears of a massive recession remind u of the great depression?

this all just opened a new window for me...ill be looking into it.

[GoddessHerb]

I think this is the key right here ^^ We are at an "OH FUCK" point, where if we don't do what we're doing... we're fucked. While it seems like our government is rushing to bail them out... I think everyone realizes that it is a bad situation. Charity should begin at home.

In regards to that quote though... I think that is so true. We are going to be changing in many ways to meet these new challenges. While we seem to be jumping to the will of Big Money CEO's... I highly doubt they will be granted such aid in the future.

Like I said... we're at an "Oh FUCK" point. They see this as the only way to "save" our country. After things are squared away... it is up to US to make sure this bullshit stops. I think that "fire" has been lit under the American people lately... and things will get interesting in the near future.

The following is not directed to TheMetal1 but rather is a general response to their and others' posts:

Whether we bail "them" (the people that created and profited handsomely from this mess) out or not we're still fucked, it's just a matter of who feels the pain and when. The boomers will postpone the pain (like they always do) until after their dead (if they can) and their kids down to their great great grand kids will be paying for this in the form of UN-CONTROLABLE INFLATION! Despite what the Fed wants you to believe.

With a bail out the pain will be slow and last a lot longer like a bad toothache. Without one it will hurt more but the pain will end sooner like a ripping off a band aid. Either way we're fucked and it's going to hurt! A lot! Oh and giving these guys more money isn't going to help any taxpayers in the end. It's just the only place they haven't sucked dry... yet. But as you give them more and more money inflation will rise so it will definitely hurt us on the way to the end. (can you say computer chips as money?) This is a generality for simplicity's sake if you care to debate the points please start another thread and I will be happy to explain and discuss the entire situation (as I see it) in greater detail.

It's sad that the citizens of this country are so clueless about money management, financing, and currency. People just don't understand the situation (including all those smarty pants' in government and business) and react out of fear due to ignorance. I'm sure I could explain it to people but I just don't think they even care to understand it. And that's where the problem lies. People are so under-educated and mentally lazy that they don't know how to think anymore. They believe what bullshit they're fed as long as they don't have to feel "bad" about anything. Feeling "bad" (ever) is generally seen as a disease now. "We" (society as a whole) medicate people, or remove them from society completely, (via hospitals and prisons) for feeling "bad" so that we don't have to feel "bad" because they do. So they won't "infect" "us" with their bad feelings and "we" can go on blissfully ignorant to the reasons these "bad" people feel "bad" in the first place. The many make the few carry the emotional burden of all for the betterment of the many to the extreme detriment of those few. The beginnings of authoritarianism in our society. We shall see which road this leads us down next.

I've been feeling "bad" for my entire life because I can see the big picture way ahead of just about everyone else, and I knew this "crisis" (among others) was coming. And now I'm glad that everyone else can't ignore that there's a great big reason to feel "bad", because things are BAD! And they're only going to get worse with or without a bailout. I can't even tell "you" (reader in general) how fucked "we" truly are. Then again I'm not sure "you" are ready to understand it as it will most assuredly make "you" feel "bad" too.

"We" should not accept ineffective government and its ineffective policies, "we" have the right, and the duty, to remove an inept government and it's arcane and obtrusive policies and install a new and better one. (maybe this time we can keep it simple, loophole free, with liberty and justice for all, not just those with enough money to buy it) It's just a matter of getting the authoritarians (followers and leaders alike) on board, and that is an almost impossible task.

Blessed be ~

[Mississippi Steve]

My biggest concern with all of this is will there be enough customers that can afford my services so that I can keep my business open for another month.

[GoldenBoy812]

The following is not directed to TheMetal1 but rather is a general response to their and others' posts:

Whether we bail "them" (the people that created and profited handsomely from this mess) out or not we're still fucked, it's just a matter of who feels the pain and when. The boomers will postpone the pain (like they always do) until after their dead (if they can) and their kids down to their great great grand kids will be paying for this in the form of UN-CONTROLABLE INFLATION! Despite what the Fed wants you to believe.

Not really, let me explain.

One can only analysize the situation as you have, if you study Austrian Economic Theory. The Austrian school believes that inflation will arise when government injects money into the economy. Yet how does the money supply increase? Money is created (mostly) in banks. The banks that you and i work with every day... Bank of America, Chase, Washington Mut, Credit Unions, etc..., all have a FDIC license to create money. Whenever someone gets approaved for a loan of any aspect, the banking system which is authorized by the federal reserve creates the money it was loaning (actually it creates 90% of it, but thats another story within itself) to the loanee. As the loanee repays the the nominal value of the note, a bit of interest (cost for doing business) is attached in various ways, and when the loan is payed off, the transfer of money earned and paid through a (x) number of years offsets the initial creation, and ties it directly to nomitive and real growth. Therefore, no inflation has been created through this transaction.

Tell me, what happens when a person defaults on their loan?

With a bail out the pain will be slow and last a lot longer like a bad toothache. Without one it will hurt more but the pain will end sooner like a ripping off a band aid. Either way we're fucked and it's going to hurt! A lot! Oh and giving these guys more money isn't going to help any taxpayers in the end. It's just the only place they haven't sucked dry... yet. But as you give them more and more money inflation will rise so it will definitely hurt us on the way to the end. (can you say computer chips as money?) This is a generality for simplicity's sake if you care to debate the points please start another thread and I will be happy to explain and discuss the entire situation (as I see it) in greater detail.

Ehh... Think about it along the lines of stitching up a brain surgery. If you rip those stitches out, the "situation" will bleed to death. That is what will happen if taxes are maintained, and credit is not freed up. We are talking a 10% across the board cut in the labor force, with an additional 5%-10% in the following year.

It's sad that the citizens of this country are so clueless about money management, financing, and currency. People just don't understand the situation (including all those smarty pants' in government and business) and react out of fear due to ignorance.

Yes it is a shame.

I'm sure I could explain it to people but I just don't think they even care to understand it. And that's where the problem lies. People are so under-educated and mentally lazy that they don't know how to think anymore. They believe what bullshit they're fed as long as they don't have to feel "bad" about anything. Feeling "bad" (ever) is generally seen as a disease now. "We" (society as a whole) medicate people, or remove them from society completely, (via hospitals and prisons) for feeling "bad" so that we don't have to feel "bad" because they do. So they won't "infect" "us" with their bad feelings and "we" can go on blissfully ignorant to the reasons these "bad" people feel "bad" in the first place. The many make the few carry the emotional burden of all for the betterment of the many to the extreme detriment of those few. The beginnings of authoritarianism in our society. We shall see which road this leads us down next.

I am not trying to put my foot down your throat, but you really are not well informed in regards to how this bailout actually works, and the possible ramifications of tax payers getting stuck with paper that is worth pennies on the dollar.

I've been feeling "bad" for my entire life because I can see the big picture way ahead of just about everyone else, and I knew this "crisis" (among others) was coming. And now I'm glad that everyone else can't ignore that there's a great big reason to feel "bad", because things are BAD! And they're only going to get worse with or without a bailout. I can't even tell "you" (reader in general) how fucked "we" truly are. Then again I'm not sure "you" are ready to understand it as it will most assuredly make "you" feel "bad" too.

The Keynesian's will always be able to prop up the system through government intervention. Human economic activity acts in seasons, where booms and busts of the business cycle change the overall psychology of consumption/ production activity. Yet in order for the system to work, real GDP growth must be achieved, as well as the practice of "buy now pay later".

"We" should not accept ineffective government and its ineffective policies, "we" have the right, and the duty, to remove an inept government and it's arcane and obtrusive policies and install a new and better one. (maybe this time we can keep it simple, loophole free, with liberty and justice for all, not just those with enough money to buy it) It's just a matter of getting the authoritarians (followers and leaders alike) on board, and that is an almost impossible task.

When this bill goes through, it will be quite effective of freeing up banks to make loans so that regular economic activity can begin. As we speak, many large businesses that require financing to sell a majority of their products will have to make drastic cuts in cost, translating into jobs being lost. If Joe's Ford cannot sell half of the cars on his lot because the financing simply is not available, what do you think will happen to Ford? Ford will have to lay off people, and what do you think that will do to their spending patterns; will they spend less or more on things like going out to eat, movies, etc...?

The fucking economy will collapse, causing firms to lower their prices to remove of inventories. This in turn will enact a deflationary phenenomon, which will cause production of commodities to decrease to offset built in costs. What happens when their is a shortage in iron? How about oil? Shortage in oil means shortage in transportation, means shortage in food at grocery markets. Do you believe a responsible government would allow such a scenario?

I feel like i am repeating myself, so i will stop there. You need to go back and rethink the ramifications of the situation. Ron Paul believes in no intervention from the federal government. Yet the good Dr. also believes in dramatically lowering taxes. You cannot prevent collapse without the proposed bailout plan unless taxes are cut big time. Since they cannot or will not, we are left with really only one option.

:jointsmile:

[dragonrider]

Yet how does the money supply increase? Money is created (mostly) in banks. The banks that you and i work with every day... Bank of America, Chase, Washington Mut, Credit Unions, etc..., all have a FDIC license to create money.

Woops! Take WaMu off the list! It just failed last night... Biggest bank failure in history...

[flyingimam]

Woops! Take WaMu off the list! It just failed last night... Biggest bank failure in history...

call it JP Morgan Chase

i think if this shit goes on we end with 2 gigantic banks: BOA and Chase

guess what... in this fucked up credit situation these 2 banks' balance sheets are just solid and well. its quite hard to shell out billions in this situation to take over a business and they both have done it.

tells me some businesses do know how to run it and some just dont get it right