Financial Meltdown: Round 2

HEre's the thing in a nutshell!

So.. do you recall when you first noticed every other commercial seemed to be for mortgage loans?

"You can finance ALL of that debt!" "Refinance NOW"
"Bad Credit, No Credit, NO PROBLEM!"
"If you qualify {breathe/ have a job} we can finance up to 110 %!"
- When did you first hear of DiTech, Countrywide?

And RE agents practically RAN out to any car that stopped to look at a 'For Sale' property.

I left M/I Homes in '01. I saw the beginning of it then but it started long before that.

 

Agreement Close?

As Wachovia and Euro-Monster bank Fortis teeter on the brink, rumor has it that terms are mostly solved.

? - Did Republicans succeed in removing Dodd's 'Mother of all Earmarks'?

 

Agreed: Now X ur Fingers!

That the runs on banks stop.

There's lots of issues remaining to be solved but the first thing is to stop 'reflexing'. Like my inclination to move my account out of Chase who's bought a few of those failers.

There's -hopefully- names gonna be named and people go to jail, but that can wait.

- - - -- - - - -- -
Added:
The Schisms: Strange Bedfellows
This situation is probably confusing to a lot of people. GOP/Conservatives were all in favor of letting those big financial companies go into the dumper.

Here's why. They pulled up to the trough and bought into that junk mortgage market on the belief that the government would bail them out. Which, of course, we are.
The problem is that all credit instruments are tied into each other and depend on liquidity in covering debt notes. When the public pulls its deposits and investments out, and the shortfall assets shrink, then this builds into an avalanche.
And all sorts of business -small, and medium especially-depend on short-term, not to mention long-term, borrowing to operate. If there's no money available to borrow, there's no operating.
In other words, the whole thing is dependent on confidence.
So what we're really doing is buying back the junk we sold them. We MIGHT be able to make money back on some of them in a few years.
- Why did the government have to do it? Because no one was able to determine what the crap was worth. So no one wanted to pay more than junk-bond prices for them. Now that the pressure is off, the bundles can be looked at and their true value determined.

All we can assume now, is that the financial corporations buying those bundles in the future look closely at what they're buying. And not buy the shaky stuff.

Then look at who squeals the loudest. At least they'll have to go out into the light to do it.

 

Ah, someone with too much time on their hands. There are so many logic flaws to this proposal I wouldn't know where to begin. Let's just say, take Don's favorite Mencken quote and apply it here.

 

Economics Lesson

Well, he did have too much time on his hands.

I made the mistake of saying to myself, he's got the numbers wrong. It obviously cant amount to that much 'per'. But it does when you look at it as pure math.

But it isnt pure math.
Here's why: The money to bail out AIG and Bear Stearns doesnt come from Treasury Capital, it comes from Treasury printing plants. That means it comes from money that did not exist prior to the action.

So... obviously... as this guy says we're all paying the cost immediately by means of an inflated dollar!

To round things off, that means the Bear Stearns/AIG actions must have cost each of us $200 for every $10,000 we have in our personal savings.

We should all be OUTRAGED!!!!!

uh... not so fast. It ALSO cost those Ultra Rich guys money. And at the same ratio. So why didnt gold go through the roof? Why is the oil price still dropping?

Well, you wont get the answer from reading that link, above, EVEN THOUGH he pointed out where the money came from!!!
That's because that guy is using it to gore his favorite ox.

So I'm going to state the question pure as I can:

The US just printed all the money it used to buy Bear Stearns and AIG. Why didnt the dollar go into a tail-spin?

A virtual cookie to the first one who posts the correct - and obvious to any who paid attention in econ 101- answer.

 

Well, you dont win any cookie for that, for damn sure.

Come ON, people. Answer my question.

Bear in mind it ONLY applies to that set of actions and not necessarily to any other actions.

 

Re: Economics Lesson


The US just printed all the money it used to buy Bear Stearns and AIG. Why didnt the dollar go into a tail-spin?

I've taken a bunch of economic classes over the years trying to answer that question. I have found that the dollar will be affected in time. I find the biggest hit it takes is by countries that have a lot of american dollars in their reserves will eventually stop investing in it. They will turn to Euros or something else that is more stable. Their is a price to pay for creating 'false' money, but sadly their is no immediate effect.

 

Here's the text of the proposed bill, for those who have an interest. I have not read through it and most likely won't. From all accounts though, it appears the ACORN payouts were scrapped.

http://porkbusters.org/index.php/bailout-bill

 

Re: Economics Lesson

And YET... you did not answer the simple question!
like I said: 'Econ 101'!
Geezy Pete! It's really simple, people.... no wonder you think I'm a smart-ass know it all. you dont even think about the basics!

Here's a hint: It might inflate the dollar down the line, it might not. But it would REALLY BE UNUSUAL if it resulted in 100% inflation per dollar printed... WHY?

WTF!

 

Re: Economics Lesson

What are you waiting for?

 

Re: Economics Lesson

Here is what I posted under the subhead: Economics Lesson:

Aw, hell... maybe I should start over.

I linked to a blog where the guy said that all the money spent to take over Bear Stearns and AIG was printed for the purpose.

And it amounted to an 'inflation tax' of 2% on all our savings and investments.

I call Bullshit. It may be inflationary, or not, but we cant know that now.

Can you answer that question, the question being why it wouldnt be inflationary on the face of it.

 

RE: Re: Economics Lesson

I understood, I just want your answer soon, because your 'answers' usually make me laugh, and work is slow today.

 

RE: Re: Economics Lesson

MEANING YOU CANT ANSWER!

I said it was 'Econ 101'... I took Econ 101. You took more than that and it probably clouded your mind..
.... just throw out all the dreck you 'leaqrned' after that and answer like it was a freshman quiz.

 

And Don doesnt know either.

I am not about to make up for the money you guys evidently threw away on your 'education', rather than actually learning to think about what you were taught.

I know the answer, it's core to our monetary system which sometimes does, and sometimes doesnt, follow the precepts of it.

 

No you dont. I even said to pretend it was a freshman quiz, and you're parroting what you learnt in 101.

The pooint of it was.. I thought.. that the guy- at the link- went to all that trouble just to ignore the obvious objection to his meme.
But now... 'it's just so i can show off.'
That I took Freshman Econ?!!

Sorry. I thought everyone could understand the concept. But it's apparent -now- what's behind 'my failure to communicate'.