The crisis on Wall Street - Is all in your head?
Reaganomics started it back in the 1980s with Phil Gramm and John McCain leading the pack - end government regulation to encourage a free market, reduce taxes to the movers and shakers, and wealth would trickle down to all of us. We've had Republican control of the Whitehouse or Congress or both for 26 of the past 28 years and these policies have held.
Now we have news of a major financial disaster that Alan Greenspan called the worst he's seen.
Phill Gramm said that the current crisis is all in our heads - we are a nation of whiners http://www.youtube.com/watch?v=1mHsuL6FfY4
McCain temporarily distanced himself, but now Gramm is back full force as McCain's economic advisor. Can we expect more of the same failed economic policies that got us into this mess? where does McCain really stand on the economy? Do his recent statements like this one at Townhall.com point to him abandoning the policies he's adhered to for decades and advocating regulation?
"Our economy, I believe, still, the fundamentals of our economy are strong, but these are very, very difficult times, so I promise you: We will never put America in this position again. We will clean up Wall Street," McCain said."
What do you think? How's this all working out for you so far? Do you believe the economy is strong?
Original Post by kathygator:
So the most direct effect will be on investors that own stock in investment companies and banks. Secondarily the ability to get loans will be commensurately more difficult, which will inevitably slow the already snail paced real estate 'recovery'.
But if you're invested in 'green technology' for instance, that technology is still going to be viable, no?
Not necessarily, this will effect a lot more than we all know, because we don't know who all had accounts with LB, it's a wait and see game.
38# yes very true, but no it will also effect you in your purse strings too, wait and see food, house hold bills will all start to go up, companies that we work for will start to lay folk off, leading to unemployment so on! What it does do however on an up note is increase your export which will help keep things going.
As someone said earlier, economies are cyclical. Ooh, Paulson just finished speaking and the DJIA is down more than ever :) Typical. IMO, right now, Lehman Brothers going under has been a major slap in the face. If AIG goes under, it will be more like a solid kick in the guts. The share price indicates that their isn't much confidence in them staying afloat. Stay tuned for some buying opportunities!!
Original Post by figurethefat:
Stay tuned for some buying opportunities!!
of course, that's what ken lay said about enron stock from july through october of 2001 too
just sayin!
:)
'gator, that's one of my favorite movies!
I just see this is as the climax of the ****-storm not the beginning. At least in the US.
It's not the first sign... It's just a progression of what we already knew was happening. Maybe ... it will wake people up about what to expect in the future with more of the same thing.
Original Post by kathygator:
I just see this is as the climax of the ****-storm not the beginning. At least in the US.
you must be expecting a fairly drawn-out and rather dramatic dénouement then
::giggle::
:)
i love that movie too
*buys up all the stock she can in pork belly futures and GI Joe*
warren buffet is someone you can listen to
other wall street types - not so much
2nd quarter GDP growth is estimated to have been 3.3%
that would be outstanding if it reflected reality
but the highest worker productivity in history came with no increase in worker income
stagnant wages meant that the only way to prop up our consumer-driven economy was with easy credit
unwise debt is a chicken that eventually comes home to roost
not all of the chickens have started roosting yet, not by a long shot
I have to say though, now I more fully understand why President Bush went around trying to sell us on putting Social Security money into private accounts from 2005-2006. He just doggedly pursued that agenda even though the public was having none of it.
If he'd been successful, that kind of cash infusion could have 'saved' the investment banks... for a while... until they brought all of it to a galloping ruin.
*facepalm*
Mom called -- her retirement is with Merrill Lynch. Great.
PS. Over 90 banks are in danger of failing. Good luck to us all.
I hope this type of crisis outrages Americans enough to get involved in the coming election. To make the election about real issues such as our economy.
Original Post by figurethefat:
I've been glued to Bloomberg and CNBC. Right now Paulson is on, and I like him well enough. Today's problems have been a long time in the making. For one low interest rates encouraged rampant speculation in housing. Once it started to lose steam, financiers became more creative so more and more people could buy houses, thinking they were be best investment ever. Combine that with the Wall Street gurus and their never ending stream of derivatives, hedge funds, blah blah blah. No surprise to me that Wall Street is in panic mode. Having worked in this business for more than 25 years I've seen similar scenarios, the current one is always "the worst." I feel for people loosing their jobs. But for the most part they are a clever, resilient bunch and they'll find positions elsewhere.
As someone said earlier, economies are cyclical. Ooh, Paulson just finished speaking and the DJIA is down more than ever :) Typical. IMO, right now, Lehman Brothers going under has been a major slap in the face. If AIG goes under, it will be more like a solid kick in the guts. The share price indicates that their isn't much confidence in them staying afloat. Stay tuned for some buying opportunities!!
I agreed with the first 50%...maybe the last 25%.
You are right, this all started with the lowering of interest rates which was seen as a way to stimulate the economy back when Bush first took office. Along with his giveaway of the surplus, tax breaks, and war expenditures...the dollar started to spiral so low that for the first time since I was born Canada's dollar was worth more (it used to be about 55-60%).
The low interest rates allowed people to buy homes...which they should have...however it also paved the way for a boom in "consolication" and "refinance" mortages...which in many cases were just ways to get people to carry more debt with their homes as collateral. People, instead of buying homes, used the low interest rates to buy homes they couldn't really afford. And right along with it...came the house "flippers" who were buying houses purely with the expecation of making money by slapping some paint on them and seeling them for a higher price.
As the national debt soared, the dollar fell, and inflation rose...the interest rates went up...and the housing market failed. Normally a minor to moderate problem for a few idiots that made poor financial decisions. However, couple that with a nation that had a rising unemployment rate and a loss of it's industrial base...as well as a rising power in China and India helping to raise global prices while reducing global wages...and suddenly the market is so flooded with houses that even the banks that ended up with the houses...had to sell them for losses.
At the same time...people's disposable income has fallen...which means they will need to take on more debt to maintain their present lifestyle. The credit card companies have made changes in recent years to try and raise interest rates and minimum payments in anticipation of disaster...but too little too late for businesses that have used predatory lending to almost force people into debt they can't afford. Enter Part II of this disater that is yet to play out...when all of those credit card users start to default...then the remaining financial institutions in this country will fall. Good news, no more credit card debt. Bad news, you just lost your retirement savings.
Why has this happened?
- The failed belief by the Bush administration that if you give rich people more money, they will loyally invest it in this country and use it to "raise up" the standard of living. Instead, the rich pocketed the money, closed up shop, and built plants in India and China.
- People are stupid. Don't buy a 1 million dollar house you can't afford, and then cry when your baloon payment comes due. An you probably don't need a Hummer to take the kids to soccer practice...unless it's in Iraq.
- Both sides of our political process are so indebted to special interests, and committed to grasping for power, that all that matters is who can get elected...not what they can do once elected. Free trade isn't working. Illegal immigration needs attention. The nation needs health care and to get a control on health care costs. We must be oil independent now, not "someday". We need to start "winning" wars, not just "fighting" wars, etc... But each time one side stands up and says, "we should close down the borders...." some aide grabs their shirtails and shows them statistics about losing the hispanic vote...and suddenly it all goes away. The oil lobbyists...the drug lobbysists...money for votes. And since we can't argue or try to solve the problems that really matter, we focus on whether gays should marry or people should say the pledge of allegience and then we spit on each other over the abortion issue.
That was longer than I meant it to be. So in closing...the part I disagreed with is...people cannot "just find another job"...not one equivalent to what they lost. Even if you take out the immigration problem, if someone loses a factory job paying $23-36/hour where they've worked since high school and they've based their entire lifestyle on...they can't simply say...I'm gonna go work at Target for $8/hour. In the past...maybe. Guys could go into the trades or construction. But with the construction industry destroyed...there's only so many high paying jobs available. And don't even think about going back to college...tuition over the past 8 years has went up astronomically. A 4-year education will now cost you $100,000...and the loans that used to ease the burden...they pretty much went bye bye as well...especially as more and more of the financial institutions crumble.
for the first time since I was born Canada's dollar was worth more (it used to be about 55-60%).
i hate to nit-pick, caloricat, but the canadian dollar has never been below $US 0.60. the all-time low was $US 0.6199 in 2002.
the whole "people are stupid" argument is pretty weak (everyone who uses it seems to take the "except me and my friends" perspective). people have been sold a load of crap about material goods being equivalent to success, but that doesn't make them stupid - just well programmed.
I'd call it ignorant as well to listen to big shots saying "The economy is strong... " while they continue to splurge on things unaffordable to their income because they're drones "Keeping up with the Joneses."
Every institution that will fail because of the mortgage crisis will do it sooner rather than later. The US and foreign interests will get together, fashion an even bigger band-aid, than the Fed alone can provide, and everyone will move on to the next 'investment opportunity' sector.
On a cof. call with our CFO, CEO, CRO, etc. US Gov't has declared it will not do anymore bailouts with taxpayer dollar.
Our (all ready conservative) policy has been switched to defensive mode.
DJI closed at -504.
So you can log your weight -- which allows you to do the following:
- Plot your weight curve
- Analyze the trend of your weight (see under Recent in the figure above)
- Determine the projected target date (see under Overall in the figure above)
