The US Economy and Current Financial Crisis

[SuperJerk]

Aw, fuck.

 

The historic carnage on Wall Street spread to Asia Tuesday, with stocks across the region plunging after Congress rejected a rescue plan that investors had hoped would bolster volatile financial markets.

 

All major stock markets in the region tumbled sharply, succumbing to heightened fears of a broader global credit crisis.

http://www.msnbc.msn.com/id/26949764/

[Richard]

As if the world needed another reason to hate us.

[The Niggardly King]

This is good. The value of things will drop. Gas will go down tremendously, houses will go down... fuck, I'm gonna buy some stocks to celebrate. This is wonderful.

[The Niggardly King]

Aw, fuck.

 

The historic carnage on Wall Street spread to Asia Tuesday, with stocks across the region plunging after Congress rejected a rescue plan that investors had hoped would bolster volatile financial markets.

 

All major stock markets in the region tumbled sharply, succumbing to heightened fears of a broader global credit crisis.

http://www.msnbc.msn.com/id/26949764/

 

Like I said, this is fucking wonderful. I mean when we fuck up this time, we're taking nearly every other free market with us. Wonderful.

[Markme123]

Fuck all this noise about fiscal apocalypse. This is great for me. I, who at 22 has nothing, can look forward to a day where I can actually buy a home in California, AND because I have learned way more about financial responsibiliy over the last month than I would have otherwise, I will be forever be paranoid like a fucker about my money. Whee!!!

 

Oh, forget about the Yen, let's work on bringing the Euro down. Daddy wants a yearly vaction to Europe by the time he's 26.

 

 

 

 

 

 

 

 

 

 

*shoots himself*

[At Home]

YEAH BECAUSE THIS IS THE FIRST TIME THAT THE GLOBAL MARKET HAS BEEN AFFECTED BY FLUCTUATIONS IN THE US' STOCK MARKET

[The Niggardly King]

Yup

[tekcop]

How come no one's pointed out the market only dropped 6% compared to 22% in 1987?

[At Home]

Because no one is interested in talking sense in this thread, apparently.

[tekcop]

Also, why are people freaking out over the stock market going down? Sure, there are some people that it affects, but the average invester hasn't really lost anything. Who was it that said something along the lines of "I haven't lost any money in the stock market. I not selling anything." It was an investment in the first place. You shouldn't be looking at your accounts on a daily basis anyways.

[At Home]

But then again I really should start investing pretty soon. I'll be able to double my investment in, what, days?

[Cheech Tremendous]

[sarcasm]Yes, everything is fine guys.[/sarcasm]

[tekcop]

Really, Cheech, as long as you don't lose your job, nothing bad has or will happen to you. Your thousands will be back eventually and nobody's going to take your house away as long as you keep paying for it.

[The Niggardly King]

Yup I be playing the stocks, E*Trade up in this bitch. Making like a couple grand a day during these hard times and then cashing out. Gotta know when to hold 'em... when to fold 'em... know when to walk away... best know when to run.

[Cheech Tremendous]

Anyways, in other news the Dow is back up today, but it's somewhat hollow because nothing has been done about the worsening credit problem.

 

But even as investors seemed to accept that a bailout might take a bit longer, strains worsened in the credit markets, which many businesses rely on to finance daily expenses like utilities and payroll. Banks increased their lending rates on short-term loans, and Libor, a globally watched benchmark rate, rose significantly. Several measures of anxiety in the market reached all-time records. And new injections on money into the markets by central bank failed to kick-start inter-bank lending.

 

“There was substantial worsening in short-term funding markets overnight,” Michael T. Darda, chief economist at the research firm MKM Partners in Greenwich, Conn., wrote in a note to clients on Tuesday morning.

 

“The money markets have completely broken down, with no trading taking place at all,” said Christoph Rieger, a fixed-income strategist at Dresdner Kleinwort in Frankfurt. “There is no market any more. Central banks are the only providers of cash to the market, no-one else is lending.”

 

Analysts and economists have pointed to the problems in the credit markets as posing a more serious threat to the health of the economy, at least in the short-term, than the recent declines in stocks.

 

http://www.nytimes.com/2008/10/01/business...amp;oref=slogin

 

While it is certainly ridiculous to claim that we are entering a new Great Depression, it is equally as stupid to proclaim that things are fine. We still need intervention in some way to remove the toxic mortgages that are binding up our financial system.

[Cheech Tremendous]

How come no one's pointed out the market only dropped 6% compared to 22% in 1987?

 

The same reason no one mentioned that the S&P dropped like 9%, which is one of the largest in history. The general (uninformed) public reacts to point drops in the stock market. Yesterday's drop in the Dow was merely a reaction to what is happening in the credit markets. Corrections in the stock market are hardly even the beginning of our current economic turmoil. However, reactions to losing $1.2 trillion might help people realize that this bailout talk is no joke.

[EricMM]

It's about the credit crunch NOT the market drops or gains.

 

No duh.

[Cheech Tremendous]

It's about the credit crunch NOT the market drops or gains.

 

No duh.

 

Seems like a lot of people are missing this point.

[Dandy]

I'd like to hear goldengreek's take on this.

[SuperJerk]

It's about the credit crunch NOT the market drops or gains.

 

A little like saying "Remember, this isn't actually the end of the world...merely the first of many signs of the apocylpse."

 

[Cheech Tremendous]

Looks like oil prices are starting to tick back up as well with news from Washington that the bailout might get done some time this week. Prices are still down about 20% over the last week, though. Ouch.

[Jobber of the Week]

Various people: This is great!

 

Uh, guys? You won't be buying your dream house if nobody is going to lend you any money to do it.

 

As for the stock market, I'd rather play here in the casinos. At least the odds are posted and the game rules are known ahead of time. If I'm playing 6:5 Blackjack then I've got nobody else to blame but myself.

[Guest]

Uh, guys? You won't be buying your dream house if nobody is going to lend you any money to do it.

People can't pay back the money they borrow in the first place, so yeah, it's a good thing they won't be able to get it and further drag our economy into the depths.

[Cheech Tremendous]

Uh, guys? You won't be buying your dream house if nobody is going to lend you any money to do it.

People can't pay back the money they borrow in the first place, so yeah, it's a good thing they won't be able to get it and further drag our economy into the depths.

So it'll be better for our economy that the only people able to buy houses are those that can save several hundred thousand dollars first? How does that make any sense?

 

No need to send our kids to college... they can save up the $50,000 a year they need first. Let's teach those kids fiscal responsibility.

 

Businesses grow? Nah. Who needs capital improvements, anyways? A stagnant economy for all!

 

Our entire economy functions on the availability of credit, 909. Yes, people who can't afford to pay it back shouldn't get a dime. But under the current duress, no one can get any money, even those who are fully capable of paying it back.

[SuperJerk]

Given that I've heard this proposal from a few critics of the bailout now, I've been wondering all day how exactly a capital gains tax cut would help the economy. Usually, cutting the capital gains tax (a tax on the profits from the sale of stocks, land, or other property and commodities) would be an incentive to sell stocks and property...but in our current economic climate, there's already too much selling and not enough buying. That's what's driven both real estate and stock prices way down. So why encourage even more selling with a cut in the capital gains tax? I just don't get it.

 

Any ideas?

 

[Cheech Tremendous]

I'm also a little confused by the new pressure to raise the limits of FDIC insurance from $100,000 to $250,000. I guess that's a nice bit of reassurance for consumers, but how exactly does that solve any problem whatsoever? Am I just missing something?

[Guest]

So it'll be better for our economy that the only people able to buy houses are those that can save several hundred thousand dollars first? How does that make any sense?

 

What's wrong with renting or living within your means? People don't NEED gigantic houses. Well, unless you have 6 or 7 kids.

 

America has become an entitlement society. Here are everyone's rights nowadays.

 

Life, liberty, the pursuit of happiness, a washer, dryer, dishwasher, two cars, a timeshare, cable television, gardener, dog and cat, video game system, college for the kids, and, oh wait, multiple credit lines. Who's supposed to pay for all this shit? When my parents grew up, they didn't get to go to college and did quite well for themselves. It's not like everyone went to college back then. Things were going well then, spirits were high, life was good. The average American has four credit cards. Why? The people who did this fucked it up for everyone. I understand that we need to get something done so that businesses can operate and use credit, but the American people?

 

Well, I don't think so. It's time to live within your paycheck and do what you can, save when you must. Not charge here here here and here, pay for it if you can, but maybe not at all. If you've got a good job, I don't see the reason to charge everything to a piece of plastic.

[Cheech Tremendous]

So it'll be better for our economy that the only people able to buy houses are those that can save several hundred thousand dollars first? How does that make any sense?

 

What's wrong with renting or living within your means? People don't NEED gigantic houses. Well, unless you have 6 or 7 kids.

 

America has become an entitlement society. Here are everyone's rights nowadays.

 

Life, liberty, the pursuit of happiness, a washer, dryer, dishwasher, two cars, a timeshare, cable television, gardener, dog and cat, video game system, college for the kids, and, oh wait, multiple credit lines. Who's supposed to pay for all this shit? When my parents grew up, they didn't get to go to college and did quite well for themselves. It's not like everyone went to college back then. Things were going well then, spirits were high, life was good. The average American has four credit cards. Why? The people who did this fucked it up for everyone. I understand that we need to get something done so that businesses can operate and use credit, but the American people?

 

Well, I don't think so. It's time to live within your paycheck and do what you can, save when you must. Not charge here here here and here, pay for it if you can, but maybe not at all.

 

 

Look, 909, you're a good guy and I've always liked you, but you seem to have a fundamental misunderstanding of our how our economy works and where money and economic growth come from. Complaining about people misspending is a far cry from massive credit freezes at the institutional level. This goes beyond little Billy and his video game system, and to the level of your employer being able to cut you a paycheck or the local grocery store having the ability to stock food for you to eat.

[Guest]

Well, that's why I said that the government needs to get something done so that businesses can function! However, I don't believe we should go around buying up bad assets.

 

Complaining about people misspending is a far cry from massive credit freezes at the institutional level. This goes beyond little Billy and his video game system, and to the level of your employer being able to employ your or local grocery store being able to stock food for you to eat.

 

The two are intertwined, somewhat. But the problem that I've seen regular people having about this whole thing is that they aren't going to be able to get credit to spend money they don't have. And seeing as with this credit crunch going on, possible credit account closures, yeah, people are going to get pissed off that they can't charge to their heart's content. Some people charge their groceries to a credit card, what happens when they can't do that? Hence my rant about what's wrong with our entitlement society. Just what I've seen.

[The Niggardly King]

Oh shit son, made $1100 in stocks in one day, this is going to be fun.

 

CASH OUT GET CHEDDAR