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brum; maybe some answers
Tweet Topic Started: Sep 26 2008, 04:49 AM (75 Views)
troubleatiu Sep 26 2008, 04:49 AM Post #1
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im going to link you to some articles that try to explain the effect of a government bail out on the financial markets. you asked what was worse case if nothing was done? nobody is 100% sure. dont believe the media's sudden catastrophic outlook; just last week we were told all was sound within the system. now we have bernecke, paulson, and all the media pundits being chicken littles about not getting a bail out. really, :wtf:
all of these links in some form or another state government intervention will only make the problem worse. so what really is worse case here? intervention or not?

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/24/AR2008092402799.html?nav=hcmodule
http://www.marketoracle.co.uk/Article6428.html
http://www.telegraph.co.uk/finance/economics/3062121/US-dollar-set-to-be-major-casualty-of-Hank-Paulsons-bailout.html
http://www.iht.com/articles/2008/09/23/business/sorkin.php?pass=true
http://www.marketoracle.co.uk/Article6451.html
and finally, a message from ron paul-
http://www.rense.com/general83/dmb.htm

i hope this helps some. you could have saved me some time and just asked lars. he's going to attempt to limbaugh my post anyway. "the fed is good, thank God for the fed, we're lucky to have guys like paulson in charge, yada, yada..."

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"The illegal we do immediately. The unconstitutional takes a little longer."--Henry Kissinger
"What luck for rulers that men do not think."- Adolph Hitler
"Terrorists don't want your freedoms--they want your life. It's dictators and tyrants who want your freedoms."-author unidentified
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brumdog44 Sep 27 2008, 10:14 PM Post #2
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Thanks. I've give them a read.
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troubleatiu Sep 27 2008, 10:27 PM Post #3
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brumdog44
Sep 27 2008, 10:14 PM
Thanks. I've give them a read.
thats all you got? i busted my ass to put together the best i could find, took an hour of my life away from me, dealt with ridicule and scorn, and thats the best you got? read the shit first, then get back with me. its just like when we were classmates at UMES: i loved throwing in on beer with you. a case (cold) back then was around $8. we'd both throw in $4 and then i'd drink like 21-22 of them. Gawd, those where the days. good ole brum: funny as hell, but always a day late and a dollar short. :rofl:
seriously, read through that and see also what i put up on boiler's post about question for me. any other questions you have, ill do my best to answer. it's a mess and i fear its only going to get worse. (wanna throw in on some beer?) :cheers:
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"The illegal we do immediately. The unconstitutional takes a little longer."--Henry Kissinger
"What luck for rulers that men do not think."- Adolph Hitler
"Terrorists don't want your freedoms--they want your life. It's dictators and tyrants who want your freedoms."-author unidentified
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brumdog44 Sep 27 2008, 10:32 PM Post #4
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As I remember it, I was always a day short and a dollar late.

And BTW, remember that one time you came back from the bathroom and wondered why your beer tasted warm and had a 'skunky' flavor to it? Well....

Anywho, I'll read through them and will get back to you. I'm doing my best to explain to my GT class exactly what the problem is, but I'm still trying to figure it all out myself.

And now I have jury duty starting Monday. :(
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troubleatiu Sep 27 2008, 10:55 PM Post #5
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brumdog44
Sep 27 2008, 10:32 PM
As I remember it, I was always a day short and a dollar late.

And BTW, remember that one time you came back from the bathroom and wondered why your beer tasted warm and had a 'skunky' flavor to it? Well....

Anywho, I'll read through them and will get back to you. I'm doing my best to explain to my GT class exactly what the problem is, but I'm still trying to figure it all out myself.

And now I have jury duty starting Monday. :(
you wanna tell your class what is going on? read every post ive put up concerning this matter. cross-reference it with old schools. put your own dynamics on it and you have what you need. my reply to boilergrad is the best i put up in regards to fractional lending. no cut and paste here so feel free to biden it yourself. i can give you numerous references from reputable financial sources that say what i did. (its not like God talked to me before i posted, you know.)
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"The illegal we do immediately. The unconstitutional takes a little longer."--Henry Kissinger
"What luck for rulers that men do not think."- Adolph Hitler
"Terrorists don't want your freedoms--they want your life. It's dictators and tyrants who want your freedoms."-author unidentified
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brumdog44 Sep 27 2008, 10:56 PM Post #6
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Through the first couple. I didn't realize that the start of the problems started to arise back pre 9-11. Bottom line there is it seems that it sounds like if you are voting simply based on tax cuts, you better be damn sure that the tax cuts are matched with a decrease in government spending.

And if the bailout happens, what is going to keep it from coming full circle back to this point again if the economy doesn't grow?
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troubleatiu Sep 27 2008, 11:10 PM Post #7
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"And if the bailout happens, what is going to keep it from coming full circle back to this point again if the economy doesn't grow?"-brum

the economy HASNT GROWN since 9/11. this a point lars and myself have argued about before. in the market, DEBT is often confused with growth. heres how.
i refinance my home and cash out $30,000 equity. i then take that $30,000 and spend it. wal-mart, jcpenney, lowes, even texas roadhouse. at first, this looks like growth. (im spending money, along with millions of others) but i dont owe a payment yet. (see where im going?) the money is now gone and im struggling to make payments due to various factors; gas is astronomical, food is astronomical, my hours were cut, i got laid off, etc...
ive been struggling to pay my debt, (that i spent, that initially showed up as GROWTH in the markets) and now i can no longer pay. so what happens? my loan defaults (as are thousands, perhaps (gulp) millions of others) and a recessionary period begins. its inevitable.
was there REAL growth earlier? fuck no. i just spent the money i BORROWED. now i cant pay it back. multiply that by THOUSANDS, EVEN HUNDREDS OF THOUSANDS, or (gulp) MILLIONS and you are where we are now.
Posted Image
"The illegal we do immediately. The unconstitutional takes a little longer."--Henry Kissinger
"What luck for rulers that men do not think."- Adolph Hitler
"Terrorists don't want your freedoms--they want your life. It's dictators and tyrants who want your freedoms."-author unidentified
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boilergrad01 Sep 27 2008, 11:29 PM Post #8
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troubleatiu
Sep 27 2008, 11:10 PM
"And if the bailout happens, what is going to keep it from coming full circle back to this point again if the economy doesn't grow?"-brum

the economy HASNT GROWN since 9/11. this a point lars and myself have argued about before. in the market, DEBT is often confused with growth. heres how.
i refinance my home and cash out $30,000 equity. i then take that $30,000 and spend it. wal-mart, jcpenney, lowes, even texas roadhouse. at first, this looks like growth. (im spending money, along with millions of others) but i dont owe a payment yet. (see where im going?) the money is now gone and im struggling to make payments due to various factors; gas is astronomical, food is astronomical, my hours were cut, i got laid off, etc...
ive been struggling to pay my debt, (that i spent, that initially showed up as GROWTH in the markets) and now i can no longer pay. so what happens? my loan defaults (as are thousands, perhaps (gulp) millions of others) and a recessionary period begins. its inevitable.
was there REAL growth earlier? fuck no. i just spent the money i BORROWED. now i cant pay it back. multiply that by THOUSANDS, EVEN HUNDREDS OF THOUSANDS, or (gulp) MILLIONS and you are where we are now.
Trouble,

For probably the first time ever i agree 100% with what you just posted. I feel some of the responsibilty has to land on the people that got the second mortgage and wasted the money. I also feel the fed for releasing the money is at fault as well as the banks for encouraging people to acquire debt.

:cheers: :cheers: :cheers:

We finally agree on something
Nothing beats an Astronaut
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brumdog44 Sep 27 2008, 11:31 PM Post #9
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troubleatiu
Sep 27 2008, 11:10 PM
"And if the bailout happens, what is going to keep it from coming full circle back to this point again if the economy doesn't grow?"-brum

the economy HASNT GROWN since 9/11. this a point lars and myself have argued about before. in the market, DEBT is often confused with growth. heres how.
i refinance my home and cash out $30,000 equity. i then take that $30,000 and spend it. wal-mart, jcpenney, lowes, even texas roadhouse. at first, this looks like growth. (im spending money, along with millions of others) but i dont owe a payment yet. (see where im going?) the money is now gone and im struggling to make payments due to various factors; gas is astronomical, food is astronomical, my hours were cut, i got laid off, etc...
ive been struggling to pay my debt, (that i spent, that initially showed up as GROWTH in the markets) and now i can no longer pay. so what happens? my loan defaults (as are thousands, perhaps (gulp) millions of others) and a recessionary period begins. its inevitable.
was there REAL growth earlier? fuck no. i just spent the money i BORROWED. now i cant pay it back. multiply that by THOUSANDS, EVEN HUNDREDS OF THOUSANDS, or (gulp) MILLIONS and you are where we are now.
I wasn't saying that the economy had grown since 9/11...quite the converse. What I was trying to say that the economy was placed on artificially high levels pre 9/11 by the fed. And since the economy has in reality actually dropped since, the fed is now at a point in which artifically dropped interest rates, meant to kickstart the economy, didn't take and we have come up even shorter. So the gamble was a loss two ways -- we didn't recoup the money that was supposed to be gained by dropping interest rates which was supposed to stimulate the economy, and the collapse of the lending institutions has now going to be funded by an already broken economy. It just seems to me like a gambler trying to chase his losses....except the gambler was broke before the game started, got a line of credit, ran out of it, and now is not only being asked to cover his losses by everyone else's as well.

Tell me if the analogy is correct...I'm still trying to grasp it.
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troubleatiu Sep 27 2008, 11:58 PM Post #10
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brumdog44
Sep 27 2008, 11:31 PM
troubleatiu
Sep 27 2008, 11:10 PM
"And if the bailout happens, what is going to keep it from coming full circle back to this point again if the economy doesn't grow?"-brum

the economy HASNT GROWN since 9/11. this a point lars and myself have argued about before. in the market, DEBT is often confused with growth. heres how.
i refinance my home and cash out $30,000 equity. i then take that $30,000 and spend it. wal-mart, jcpenney, lowes, even texas roadhouse. at first, this looks like growth. (im spending money, along with millions of others) but i dont owe a payment yet. (see where im going?) the money is now gone and im struggling to make payments due to various factors; gas is astronomical, food is astronomical, my hours were cut, i got laid off, etc...
ive been struggling to pay my debt, (that i spent, that initially showed up as GROWTH in the markets) and now i can no longer pay. so what happens? my loan defaults (as are thousands, perhaps (gulp) millions of others) and a recessionary period begins. its inevitable.
was there REAL growth earlier? fuck no. i just spent the money i BORROWED. now i cant pay it back. multiply that by THOUSANDS, EVEN HUNDREDS OF THOUSANDS, or (gulp) MILLIONS and you are where we are now.
I wasn't saying that the economy had grown since 9/11...quite the converse. What I was trying to say that the economy was placed on artificially high levels pre 9/11 by the fed. And since the economy has in reality actually dropped since, the fed is now at a point in which artifically dropped interest rates, meant to kickstart the economy, didn't take and we have come up even shorter. So the gamble was a loss two ways -- we didn't recoup the money that was supposed to be gained by dropping interest rates which was supposed to stimulate the economy, and the collapse of the lending institutions has now going to be funded by an already broken economy. It just seems to me like a gambler trying to chase his losses....except the gambler was broke before the game started, got a line of credit, ran out of it, and now is not only being asked to cover his losses by everyone else's as well.

Tell me if the analogy is correct...I'm still trying to grasp it.
the analogy is correct. you pretty well got it. but still, for me, read my elaborate posts here. incorporate them into your lesson plan. but, as i said earlier, put your take on it as well. youve come a long way my friend.
what scares me the most is the derivative market (over $500 trillion) and the credit default swaps (CDS). i dont think anybody factored in what happens when the "call" is placed. NOBODY knows what to do about them. my guess is if the market is allowed to correct itself, by this time next year the DOW will be in the 7000 range. but i really dont think the government will allow it to correct itself. seriously guys, it WANTS TO GO DOWN. IT HAS TO GO DOWN. ITS ARTIFICIALLY INFLATED. but there's so much "money" at stake who knows? ive called bear stearns collapse, lehman brothers, and wa mu. wachovia and wells fargo will be next. but still, i really dont know what the fuck is going on. all you need to do is look at debt/asset ratios. but theres so many over 20/1 theres going to be many that fail.
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"The illegal we do immediately. The unconstitutional takes a little longer."--Henry Kissinger
"What luck for rulers that men do not think."- Adolph Hitler
"Terrorists don't want your freedoms--they want your life. It's dictators and tyrants who want your freedoms."-author unidentified
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brumdog44 Sep 28 2008, 12:08 AM Post #11
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I'd bet the market would drop lower than 7000 in a year if no government intervention took place....hell, Bush has already used the 'panic' term and right as rain if people are going to start bailing on their investments, looking to sell anything and everything without the buy out. Trading has gotten TOO EASY for the average person. There are too many short term investors out there sitting on their computers making internet trades trying to make a quick buck.

And if the market crashes, we'll get to see an even greater divide...those with the capital to wait it out long term will snatch up stocks at bargain basement prices.

We both know that the government is going to bail the firms out...it's a reality. Not because necessarily that it's the right thing to do, but because typically politicians are willing to put the bill on future generations to gain favor now.
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troubleatiu Sep 28 2008, 12:18 AM Post #12
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Sep 28 2008, 12:08 AM
I'd bet the market would drop lower than 7000 in a year if no government intervention took place....hell, Bush has already used the 'panic' term and right as rain if people are going to start bailing on their investments, looking to sell anything and everything without the buy out. Trading has gotten TOO EASY for the average person. There are too many short term investors out there sitting on their computers making internet trades trying to make a quick buck.

And if the market crashes, we'll get to see an even greater divide...those with the capital to wait it out long term will snatch up stocks at bargain basement prices.

We both know that the government is going to bail the firms out...it's a reality. Not because necessarily that it's the right thing to do, but because typically politicians are willing to put the bill on future generations to gain favor now.
you no longer need my advise. you are right on it buddy. i really couldnt have said it better myself. so with that in mind, ill drink another beer and eat my cheese and crackers.
seriously, you want to present a lesson to your class? you have the tools you need.
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"The illegal we do immediately. The unconstitutional takes a little longer."--Henry Kissinger
"What luck for rulers that men do not think."- Adolph Hitler
"Terrorists don't want your freedoms--they want your life. It's dictators and tyrants who want your freedoms."-author unidentified
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troubleatiu Sep 28 2008, 12:21 AM Post #13
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boilergrad01
Sep 27 2008, 11:29 PM
troubleatiu
Sep 27 2008, 11:10 PM
"And if the bailout happens, what is going to keep it from coming full circle back to this point again if the economy doesn't grow?"-brum

the economy HASNT GROWN since 9/11. this a point lars and myself have argued about before. in the market, DEBT is often confused with growth. heres how.
i refinance my home and cash out $30,000 equity. i then take that $30,000 and spend it. wal-mart, jcpenney, lowes, even texas roadhouse. at first, this looks like growth. (im spending money, along with millions of others) but i dont owe a payment yet. (see where im going?) the money is now gone and im struggling to make payments due to various factors; gas is astronomical, food is astronomical, my hours were cut, i got laid off, etc...
ive been struggling to pay my debt, (that i spent, that initially showed up as GROWTH in the markets) and now i can no longer pay. so what happens? my loan defaults (as are thousands, perhaps (gulp) millions of others) and a recessionary period begins. its inevitable.
was there REAL growth earlier? fuck no. i just spent the money i BORROWED. now i cant pay it back. multiply that by THOUSANDS, EVEN HUNDREDS OF THOUSANDS, or (gulp) MILLIONS and you are where we are now.
Trouble,

For probably the first time ever i agree 100% with what you just posted. I feel some of the responsibilty has to land on the people that got the second mortgage and wasted the money. I also feel the fed for releasing the money is at fault as well as the banks for encouraging people to acquire debt.

:cheers: :cheers: :cheers:

We finally agree on something
boiler, aside from foreign policy we agree alot, i think. its just that, that issue, causes us to want to fight. i respect the hell out of you; i think youre misguided at times though.
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"The illegal we do immediately. The unconstitutional takes a little longer."--Henry Kissinger
"What luck for rulers that men do not think."- Adolph Hitler
"Terrorists don't want your freedoms--they want your life. It's dictators and tyrants who want your freedoms."-author unidentified
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