PatsFanInVa

I think the trickiest thing is that we're arguing likelihoods not crystal-ball certainties (like frinstance, it's a lock that the Pats will beat the Dolphins)

Here's a little screed by one of the pro-bailout voters:

Commentary: America can't go cold turkey on credit - CNN.com

I think it sums up my thoughts on a "let it all tank" vs. "get some liquidity out there" option.

"Bailout vs. no Bailout", in all probability, boils down to "Cold Turkey" versus "cutting down."

Cold Turkey carries an elevated chance of an immediate hit that's too big to absorb, and therefore creates upheavals disproportionate to the total number of dollars lost. Once a job is gone, for a long time at least, that job is gone. If we bleed jobs over a period of a couple of years, the possibility is that the spiral can be controlled. If we axe 5% of them in 3 months -- i.e., if unemployment goes from 6% to 11% by January -- we carry those lost jobs for the period of "recovery," to the extent that recovery happens. But again, it's the probabilistic nature of the outcomes that has all our heads spinning. Hey, what if nothing happens? What if it's the same outcome? Then aren't we being dumb by not sharing the pain with Wall Street? These questions give me pause, but I don't get how the leadership of the Senate and House (on both "sides",) and the Administration, are all so taken in by the crisis, if the reality is "Eh, doesn't matter." I know what Michael Moore says, and I know what Lou Dobbs says... it does not make sense to me.

(That said I would prefer that we address the loans at the consumer end and let the liquidity follow, although I am not so sanguine that the liquidity would follow soon enough to avoid exactly the same problems that doing nothing would invite. Add to that the fact that the same Wall Streeters immediately benefit, because once again their "bad paper" is good paper now, if it does work. We can't have a net positive effect on jobs and still punish "The Street," from that point of view.)

My worry is that for the serious addict (in this case, of credit), neither cold turkey nor gradual withdrawal works unless the addict is ready. And if congress tells the people they don't really need to be ready, they can keep borrowing through unrealistic tax cuts, etc., then we never fix a big part of what ails us: the national part of the debt we're all carrying.

Interesting times... I wonder if this is finally the crisis that gets Americans to understand the differences between millions, billions, and trillions... I think that understanding is key to our future.

PFnV

mcgraw_wv

They say Credit Markets are freezing up...

Would it be so bad that business can't spend money they haven't made yet, and that business and society spends based on what they've Earned, and NOT borrowed against what they possibly could earn?

Good... Credit Markets are freezing up... Rush just made a good point on his show, creditor are not giving out credit and selling their assets when there is a looming large pay out via the government in the works... The best solution would be the government to just say " there will be no golden parachute "...

NovaScotiaPatsFan

I dunno, to sell someone has to have enough money to buy...

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PatriotsReign

Same here STFarmy! It's a joke. The hardest thing to understand is that when and if a bailout passes, the markets will jump upwards. Even though the economy is going to get worse, not better for the foreseeable future.

There is no reason for optimism that the investment market will be getting any better when you consider;

-Accelerating unemployment
-Declining consumer spending
-Continued declining real estate market
-Tighter credit
-Poorer foreign investment performance
-Declining demand for durables

All of this is going to take years to turn around. And even the stock market fluctuations will level off in time. Investors will become much less reactionary and enticements for day-traders dwindle. In the long-run, the investment markets will return to solid & prudent decision making on performance. The days of making money off "betting" on the markets will disappear.

Real World

When the market dropped close to 800 points, that meant somewhere in the neighborhood of a $1 trillion in lost wealth. We can all debate how relevent the Dow Jones is to the actually economy, but a $1 trillion disappearing in a single day doesn't help. Furthermore, credit doesn't just mean some retard getting a $400,000 mortgage on his $50k a year salary. It means construction loans for projects that employ workers, commercial loans that fuel business, and lines of credit that enable people, and business', to float recievables, and still operate to their maximum. Beyond all that, there's still the uncertainty surrounding some banks (my biggest concern).

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"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897

mgcolby

Not to derail this thread but this is the best thread I have read on here in a while, if not ever. No name calling, calm logical discussion and none of the my side is better than your side crap.

Congrats, it is just to bad that it took something like this to make us put aside our differances.

Now back to the calm, rational and logical discussion to which I have nothing to add, as I am not an investor or an economy guru or novice for that matter. But this thread has been educational for me.

Thanks.

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STFarmy

This is the way of humanity. We always squabble amongst each other, unless in the face of shared danger. If you find this intriguing, I suggest you read Watchmen by Alan Moore and Dave Gibbon. Yes it's a graphic novel (comic book), but it's fantastically layered and philosophically deep.

Not to derail the thread.

MrBigglesWorth

Greed and list for power creatd this mess.

Deregulation and all these other schemes like derivatives/swaps were just vehicles to get the greed and power lusted for.

I get a kick out of govt wanting to create another agency to monitor this money if the bill is passed. didn't candidates say govt needs less govt and not more govt?

the thing that is most troubling is we have two opposing forces going on:

saving versus spending

for so long we have been taught to spend spend spend and really people need to save in their actual bank accounts. I do think wealth in the form of 401k's or mutual fund is too stable to count. though it does count a bit.

what incentive is their to save now? interest rates bite and have done so for a while. the fed is not going to raise rates to further stall the economy

During WW2 the government sold war bonds to finance the government.

I honestly think govt should sell bond with high earning interest rates above current market levels that are guaranteed encouraging people to save and in turn this money could be used to get the economy going.

Just an idea.

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scout

I bought 100 shares of GE today.

PatsFanInVa

YOU D1CK!

just kidding

PFnV