Stock market in a free fall

[superjames1992]

Re: Stock market in a free fall

Anybody else hope this bailout falls through? I sure as hell do because I think it's ridiculous. Why are we making the poor pay for the rich? The fallacies of these banks were the cause of their own lack of due diligence, let them FAIL.

Now we're going to ruin the dollar and be stuck in an even worse depression while we prop up the prices of stocks.

It's simple economics...the market corrects itself! That's what it is trying to do right now and the government is trying to correct the prices.

Pretty sure that's not the way this country is supposed to be ran.

This is extremely frustrating to watch.

We need the businesses that made mistakes to fail. The market will drop for now, but then the other companies which have good procedures and practices will have their value rise and they will get more business. Consumer confidence will rise and we get rid of the "bad" companies. Why are we saving companies which made terrible decisions?

Man oh man...!!!!

I concur. The government getting involved does not fix anything. It only further complicates things. The market always corrects itself. If you take any 10 year period in the nation's history, the market would have gone up over that time, even during the Great Depression (source: Dave Ramsey).

Look at the Great Depression. It lasted only about a year in foreign countries, but because the government got involved here, it lasted about 10 years.

It is stupid to nationalize these failing companies. They failed so they should go out of business. That is capitalism.

[ZB9]

Re: Stock market in a free fall

as far as regulation, I would bet these banks will start being regulated by the US Treasury department directly, because of their impact on the American economy, instead of being regulated by the Dept of Housing and Urban Development and the Office of Federal Housing Enterprise Oversight.

[callmetaternuts]

Re: Stock market in a free fall

The thing is, covering the life insurance and all that is quite a bit of risk. Its more than the money they put in. If you paid $1k a year starting now, that might guarantee you $500k in insurance upon your death, which they arent planning on paying out for 40-60 years. So if youve paid 4k, they are on the hook for that 500k. Now imagine that a ton of people are in that same situation. They dont have the assets on hand to guarantee that insurance to all those people.

People acknowledge that there is risk, but you cant just let a huge insurance carrier like AIG default on all of their insurance and accounts. I work with insurance, annuities, and securities every day, there's alot more to this. AIG has to be held up by someone or bought out, they cant just hope someone buys all the paper.

[callmetaternuts]

Re: Stock market in a free fall

The bigger issue is the credit market. If they dont regulate that more, or get some flow into that section, we will be screwed. The govt needs to take some of these bad mortgages on to free up cash for these banks and holding companies. That will give them more money and peace of mind to lend to consumers (at lower rates). If the housing problem continues, and people keep fleeing into treasuries, loans wont be taken out as much as most people tie their money up in fed funds/treasuries, so since they arent taking out loans, the banks and mortgage companies hike rates up bc less loans means less interest unless you raise rates. By doing that, people borrow even less, and pretty soon, the economy comes to a halt bc money isnt being moved around, its being locked up for months on end.

This is a huge issue, humongous. Thats why the Fed keeps lowering rates and handing out rebate checks, to try and circulate money rather than have you (us) sit on it. This whole thing is predicated on lending practices starting in the 80's with sub-prime and variable rates on mortgages and ARM's.

I dont like the bailout one bit, but if the gov't doesnt do something to prop up this economic disaster, we are in for alot worse. And yes, the Depression may have sorted itself out, but you know how they did that? They bought back those faulty loans, they bought mortgages that were being written off to free up cash so the banks could loan out money and free up the balance sheet.

The money that has been put into AIG to buy the 79.8% stake is at a HUGE interest rate and will be paid back. That benefits us as taxpayers. The bailout, again, while maybe not necessary in the 700 Billion format is needed. This is more than a loan to bailout AIG and to pay top executives, it is a loan thatwill generate money for the country. Not today or tomorrow, but when AIG gets propped up. We did the same thing about 10-12 years ago when we loaned Mexico money. The taxpayers paid for it, but we got the loan paid off + interest (approx 600 million worth of interest).

Let's hold tight, see what they are gonna do and realize that we arent just loaning a "buddy" $700B, that it goes alot further and deeper than that. This is about keeping our loan system, our credit/debt system and economy working like it should. Every dollar that people lock up right now by fleeing for safety in treasuries is a dollar that cant be loaned or used.

[Double Eights]

Re: Stock market in a free fall

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

- Section 8 of bailout plan.

Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

There goes your country.

- Ron Paul.

[MassNole]

Re: Stock market in a free fall

I am willing to bet the Supreme Court has issues on that.

[SPTO]

Re: Stock market in a free fall

Yeah looking at that one provision the Supreme Court will kill it even if congress passes it.

[MassNole]

Re: Stock market in a free fall

Well the scary thing is a strong argument can be made that the Supreme Court doesn't have jurisdiction over this. That being said it's ultimately their decision and if any provision in the history of the world is going to open up the floodgates for corruption in the government, it would be that one. I mean wow, just wow that is stretching governmental authority as far as it goes. IMO, the Supreme Court does have jurisdiction to state it can't be cut out like that and that he cannot be given complete criminal immunity for his actions.

[stewaat]

Re: Stock market in a free fall

I love Ron Paul

[Pappy Knuckles]

Re: Stock market in a free fall

Ron Paul speaks more truth than any other politician out there. It's sad that his own party acts like he's some kind of alien

[The C]

Re: Stock market in a free fall

I am so happy I got into the guillotine business. Once the economy really falls, we'll have a French Revolution on our hands. I'm going to make a killing.

[MassNole]

Re: Stock market in a free fall

You know after listening to Bill Clinton last night, I don't know if I am as opposed of this as I was before. It isn't exactly unprecedented for the Government to bail out a huge corporation who provides lots of jobs, and as Clinton pointed out as a country we have profited from doing this in the past. Granted, I would rather see a company like AIG opened up to be bought out by other companies such as say MetLife, but I understand that this can work and that it has worked in the past. If the proposed law goes through, I wonder what it would take to give the job with no oversight to Warren Buffet.

[Trevytrev11]

Re: Stock market in a free fall

What I am about to say it incredibly elitist, but so be it, those who should go to college are those who can afford to do so. If you don't have the money, well then you could either do your best to find a scholarship or you can join the military and take advantage of those programs. It is time for the tax payers to stop picking up the tab for the 4 year party most call college.

http://www.finaid.org/loans/

Roughly 2/3 of four year college students receive financial aid. By making it harder to receive funds for a college level education, we're going to be left with that many more uneducated people trying to join the workforce. I get your point, but why take credit away from the one group of people who are actually using it to make them better people. And imagine how much harder it would be to obtain scholarships with so many more people (hundreds of thousands/millions???) in need of financial help. Besides the military (where you could possibly die in battle as you are just trying to earn money for an education), where else could you turn for money? With college costing upwards of $50-$100K, your talking about working 5-10 years at a low paying job to get into college as a 30 year old. By then, who's going to want to go back to school for 4-5 years and be 35 year old just joining the professional workforce.

I mean of all things, why punish those that want to get an education instead of those that want to buy a luxury vehicle on a minimum wage salary or want to open up a credit card to buy a video game system.

I mean if you're going to punish people by refusing credit, do it to those that are using it for luxury instead of to those that are actually trying to make themselves a better person.

And while some may treat college like a 4 year party, those people usually don't make it past year 1. My experience must have been different than yours because the high majority of people I went to school with took it serious and are much better for it.

Plus you'd see a lot of public colleges and universities go bankrupt as well. If 2/3 of those at four year schools are using financial aid it total, it's probably 75-80% at public schools (probably not a lot of people going to Yale, Harvard or Stanford on the governments dime). So you cut their enrollment by 80% and they won't be able to afford to stay open.

Finally, we need to firmly enforce immigration laws and make sure those here illegally pay their share. I don't have the exact figure in front of me, but I know we lose billions a year in money that gets sent out of the countries without taxes being paid on it. We could also legalize certain illegal substances and slap a hefty tax on their sale. Sure, we can continue to waste money on drug prevention, but lets let the drugs themselves pay for that education.

I don't disagree with this at all. $700 Billion would easy to raise if they legalized weed.

-Here is another idea, why not punish those individuals that are fiscally irresponsible. Forget bankruptcy and wiping away your debt and only getting stuck with a crappy credit score for the next 7-10 years (which most that file already have). How about jail or mandatory community service time for those that default on their credit. You default, you get to mop floors and scrub toilets at Fannie Mae, Freddy Mac or AIG (Hey, we got to keep their expenses to a minimum).

I mean someone buys a house they can't afford two years down the road after the interest rate rises or their balloon payment is due and what happens? They walk away with no true punishment and walk right into another loan or into an apartment. They don't lose anything.

There are too many people that live so far beyond their means that his is inevitbale. People making $5,000 a month and paying a $4,000 mortgage, then leasing a car and carrying everything else on credit. Then Boom!

[Trevytrev11]

Re: Stock market in a free fall

$750,000,000,000 / roughly 200,000,000 tax payers = $3,750 each.


Here is your $600 stimulus check, please send us back $3,750...sounds like it's time to have another kid to offset that increase

[Trevytrev11]

Re: Stock market in a free fall

Ron Paul speaks more truth than any other politician out there. It's sad that his own party acts like he's some kind of alien

That's the worst part of it. If he had some backing from his own party, he could make a serious run, but because he's so "off the wall" from his party, he'll never get the backing he needs to do so.