Stock market in a free fall

[callmetaternuts]

Re: Stock market in a free fall

Now that the Fed is involved, the paper will be bought and guaranteed. Premiums will rise for sure on life insurance policies, but that's life i suppose, but all the cash value they accumulated, all the sub-accounts and monetary values aren't and won't be lost, they arent even held at AIG, that seems to be what no one understands.

It's causing quite a stir in the insurance business and financial world now. Alot of panic in the mass public with AIG stuff when no one even really understands what this is all about. Mob mentality.....

[fistofrage]

Re: Stock market in a free fall

Now that the Fed is involved, the paper will be bought and guaranteed. Premiums will rise for sure on life insurance policies, but that's life i suppose, but all the cash value they accumulated, all the sub-accounts and monetary values aren't and won't be lost, they arent even held at AIG, that seems to be what no one understands.

It's causing quite a stir in the insurance business and financial world now. Alot of panic in the mass public with AIG stuff when no one even really understands what this is all about. Mob mentality.....

Its always been a mob mentality. One unfounded positive rumor about the state of the economy could send Wall Street surging up again. Its all speculation, the actual hard founded reality only has minimal effects on the market compared to what the soothsayers spin.

[EWRMETS]

Re: Stock market in a free fall

I generally believe in a free market but you cannot be lax on regulating an industry if there remains the possibility that the government will step in and make loans to these companies when things go bad. The AIG loan seems necessary but this all could have been avoided if there were smart regulations about subprime mortgages.

[fishepa]

Re: Stock market in a free fall

Its always been a mob mentality. One unfounded positive rumor about the state of the economy could send Wall Street surging up again. Its all speculation, the actual hard founded reality only has minimal effects on the market compared to what the soothsayers spin.

Which is the exact reason I hate the stock market.

[callmetaternuts]

Re: Stock market in a free fall

Its always been a mob mentality. One unfounded positive rumor about the state of the economy could send Wall Street surging up again. Its all speculation, the actual hard founded reality only has minimal effects on the market compared to what the soothsayers spin.

Which is the exact reason I hate the stock market.

I agree and disagree, the mob mentality is def there, but the market is driven by other forces, i.e. big hedge funds. If those big funds decide one day that natural gas or tech stocks are good/bad and begin to buy/sell those stocks, that moves the whole market. Your (or mine) $10k mean nothing when these companies are literally moving in blocks of $1MM or more. When those hedge funds move, thats all that matters.

You're right though, fundamentals dont matter much in turbulent times, but they will show you the strong companies that will be around.

[J0nnD0ugh]

Re: Stock market in a free fall

Question: W/the government buyouts of these institutions, do the execs get fired? It seems if they make an $80B mistake, that would be proof they don't know what they are doing. And I would hope they would lose their bonuses & such. But that's probably too much to ask.

Its also amazing that more people know Ed Hochuli after his mistake than they do the chief officers of AIG, Fannie Mae, etc. These guys have put the entire planet in financial peril & I couldn't tell you their names or wouldn't recognize them if they were sitting right next to me. They should have their faces plastered all over the place. I'm sure some folks would like to have a little neighborhood get together wthem, complete w/torches & pithcforks, say around 1AMish.

[callmetaternuts]

Re: Stock market in a free fall

My guess (and i dont know the terms of the bailout) would be that senior management and the board get the heave ho. I do know that the terms of the bailout did provide the gov't with the right to terminate management, but no word on what they will do.

It doesnt matter if they get fired, they have their golden parachute. Now, if they did something blatantly fraudulent, then they can lose that, but it just appears to be negligence along with sub prime garbage.

The markets cant take much more of these big down swings, consumer confidence is already low, and a ew more clicks down and it will be nasty.

[EWRMETS]

Re: Stock market in a free fall

Question: W/the government buyouts of these institutions, do the execs get fired? It seems if they make an $80B mistake, that would be proof they don't know what they are doing. And I would hope they would lose their bonuses & such. But that's probably too much to ask.

Its also amazing that more people know Ed Hochuli after his mistake than they do the chief officers of AIG, Fannie Mae, etc. These guys have put the entire planet in financial peril & I couldn't tell you their names or wouldn't recognize them if they were sitting right next to me. They should have their faces plastered all over the place. I'm sure some folks would like to have a little neighborhood get together wthem, complete w/torches & pithcforks, say around 1AMish.

As part of the AIG loan, the government replaced the CEO.

[stewaat]

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...!!!!

[callmetaternuts]

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 agree with 95% of what you said, the issue is with the people holding the "paper" of that company. If you paid for life insurance, variable annuities, 401(k), etc with AIG, wouldnt you want something out of that? Having a major carrier fall and not be able to guarantee its paper would cause huge problems.

I think the bailout is overblown at this point, but there are parts of it that are necessary to help those in need. I work in the brokerage industry and am surrounded by this "paper", and i see the real life effects its having. The people that hold these products are hosed if AIG vanishes.

[boomhauertjs]

Re: Stock market in a free fall

I was happy to read that there may be some limits to executive pay for the bailed out companies as a condition to taking the bailout. I think one of the biggest problems in our economy is the ridiculous salaries, bonuses, and buy-outs executives get, even when their companies are failing.

Unfortunately, however, I'm sure they will find out a loophole around these conditions and these fat cats will continue to get fatter.

[callmetaternuts]

Re: Stock market in a free fall

I was happy to read that there may be some limits to executive pay for the bailed out companies as a condition to taking the bailout. I think one of the biggest problems in our economy is the ridiculous salaries, bonuses, and buy-outs executives get, even when their companies are failing.

Unfortunately, however, I'm sure they will find out a loophole around these conditions and these fat cats will continue to get fatter.

I totally agree. It should be based on pay for performance. I have no problem with these guys getting paid a good amount of money, but i think it needs to be on a payout method. I.E. (im making these numbers up), if the CEO gets a 20 million retirement package, the 20 Mil should be placed in a fund of sorts to guarantee some return for him. Instead of paying it out all at once, pay 10% a year. THis way, if the company blows up 4 years down the road based on his mistakes, he's done, no more money.

No reason to pay these guys the entire golden parachute up front. Especially when he's not the one making the calls. The CEO is on the hook for alot, but lets be honest, they are in the dark on alot, kind of like the President of the USA. He doesnt call all the shots, and is aware of what he needs to know.......

[callmetaternuts]

Re: Stock market in a free fall

I totally agree. It should be based on pay for performance. I have no problem with these guys getting paid a good amount of money, but i think it needs to be on a payout method. I.E. (im making these numbers up), if the CEO gets a 20 million retirement package, the 20 Mil should be placed in a fund of sorts to guarantee some return for him. Instead of paying it out all at once, pay 10% a year. THis way, if the company blows up 4 years down the road based on his mistakes, he's done, no more money.

No reason to pay these guys the entire golden parachute up front. Especially when he's not the one making the calls. The CEO is on the hook for alot, but lets be honest, they are in the dark on alot, kind of like the President of the USA. He doesnt call all the shots, and is aware of what he needs to know.......

President Bush is addressing the nation tonight at 9 PM on this crisis. For those who don't understand, it is more severe than the debacle in Oct 87 and has been in the making for 20+ years based on how loans and debt is secured. This has the potential to grind our economy to a halt if something isnt done. Im not suggesting that the $700B buyout is the plan, nor do i pretend to understand all the moving parts that the financial wizards do, but i do understand that $700B of taxpayer money is alot and increased the national deficit more than it needs to.

This is debt that our generation (I'm 28) and the next generation will be stuck with. Interested to see what happens, and ive got a front row seat from a brokerage firm that is watching all this happen (not one of the on the news).

[Herbsinator]

Re: Stock market in a free fall

Apparently Warren Buffett is going to put $5 Billion into Goldman Sachs. So hopefully that will help buyer confidence a bit.

[Pappy Knuckles]

Re: Stock market in a free fall

I really hope they don't rush and make a dumb decision because Congress is about to go to a recess. They need to postpone it until they come up with a good solution.