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  • bailout fails, stocks crash, now what...

    So now what?

    I'm a simple man, and really have no clue what all this crap was about... now that the house has defeated the bailout plan, and stocks closed -777 today, whats next? Whats all this mean to us regular peops who have working jobs, plenty of bills, but not drowning?

    Who or what will all this effect now?

    Just wondering.
    Magnum |TG-18th|


    We stand between chaos and order, evil and good, despair and hope - we are the Thin Blue Line, and we will never be broken.


  • #2
    Re: bailout fails, stocks crash, now what...

    It means you better start buying ammo and canned beans.

    Comment


    • #3
      Re: bailout fails, stocks crash, now what...

      It's pretty simple:

      There are people who cannot afford to buy houses. Liberals decide to make themselves look like Good Guys by telling lenders that they should issue loans that they would not issue to they who cannot afford to buy houses, ergo, cannot afford to honor a loan to buy a house.

      Suddenly, the banks have all these dud loans and the market values of the properties are in the can so forclosure doesn't even break even. This puts investors in a bad position. As far as the bail-out is concerned; passed, it would be somewhere between the Gov becoming even-more-communist and the Gov printing what was it, hundreds of billions of the Uncle Sam Fun Bucks while the signing pen slides across the bill -- bad but more of the same. Halted, the stocks tank (as we saw) because of an instant arctic chill passing through investors because all these banks are going to take it to the chin, and many are made of glass. However, the stocks will likely recover better this way than if the bail-out had driven everyone down via even more inflation than we are already suffering currently.

      What it means to you is if you have investments, even the "safe" stuff may have taken a hit. The bank market is contracting because the weak herd members are being picked off. If you are employed and financially solvent, carry on citizen; part of your savings account should be in the true sound investments: pickle jars, durables, guns and ammo, quality food, and toilet paper.

      Comment


      • #4
        Re: bailout fails, stocks crash, now what...

        http://www.tacticalgamer.com/sandbox...00-thread.html
        Dude, seriously, WHAT handkerchief?

        snooggums' density principal: "The more dense a population, the more dense a population."

        Iliana: "You're a great friend but if we're ever chased by zombies I'm tripping you."

        Comment


        • #5
          Re: bailout fails, stocks crash, now what...

          Judging by the spelling of that thread's title, I expect Magnum wanted a more-mature and summarised discussion and thus created a topic free of cats.

          Comment


          • #6
            Re: bailout fails, stocks crash, now what...

            exactly... 5 plus pages of urban-onics? lol no thanks, i was really looking to see what people thought in relation to the middle class type, which i assume is what most of us TG members are, or near.
            Magnum |TG-18th|


            We stand between chaos and order, evil and good, despair and hope - we are the Thin Blue Line, and we will never be broken.

            Comment


            • #7
              Re: bailout fails, stocks crash, now what...

              Are you looking for the "what should I do tomorrow morning" or the "what happened?" summary? For a what happened summary, I think of it this way (though it's an oversimplification):

              Joe buys and sells used cars - one at a time. Joe spent $5k for a used truck, intending on reselling for $6k. Joe finds out it gets 1 mpg and can't sell it... not even for $100. So now Joe is stuck with this crappy truck in his driveway and has no money. That means he can't buy another used car to resell - so he can't make money.

              The government, seeing Joe's predicament, agrees to buy Joe's truck for $500 even though it's not worth $100. This is intended to provide Joe with some cash to let him resume buying and selling cars. (If the government is lucky, sometime in the future, they'll be able to sell the truck for more than $500, but it's not likely)

              ... basically all these investment banks bought 'stuff' that lost it's value. So all their money got tied up in stuff they couldn't sell. That means they can't lend money to each other - which is how they make money. If banks don't have the cash to lend, that means YOU won't be able to get a car loan or equity line on your house. It also means that business that operate with a floating line of credit won't be able to operate as normal, so they'll have to scale back to meet budget - drop a shift here, cancel that order for a new K9 cruiser ;)



              As far as the 'what do I do now' - I have no idea... I'm going to work in the morning and hoping my key-card still works :D

              Comment


              • #8
                Re: bailout fails, stocks crash, now what...

                Originally posted by WhiskeySix View Post
                As far as the 'what do I do now' - I have no idea... I'm going to work in the morning and hoping my key-card still works :D
                Amen brother.
                Iím not racists, I have republican friends. Radio show host.
                - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
                - "A foolish consistency is the hobgoblin of little minds" - Emerson
                - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
                - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
                - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

                Comment


                • #9
                  Re: bailout fails, stocks crash, now what...

                  Great BBC page about sub-prime crisis.

                  And basically the bailout is for the large investment banks participating in the "mortgage bond market" as seen in the flow chart. Oh well, this was a long time coming. The Financial Insurance and Real Estate (FIRE) lobby has been lobbying senators for eons and eroded the Glass-Steagal Act like a sea wears away a beach. Investment and savings banks underwent a quiet marriage over the decades and now they both get to sink together.

                  What do you do now?

                  Laugh and cry.
                  The art of war is simple enough. Find out where your enemy is. Get at him as soon as you can. Strike him as hard as you can, and keep moving.



                  I
                  #83 of 213 things you cannot do in the army.
                  83. Must not start any SITREP (Situation Report) with "I recently had an experience I just had to write you about...."

                  Comment


                  • #10
                    Re: bailout fails, stocks crash, now what...

                    can someone help clarify? for lack of better words... how f***ed are we?

                    Is it time to start looking for homes in europe/australia, or are we going to be able to live here happily for a few more years.

                    Edit: im simpler terms.... Scale of 1 to 10.

                    1 being Keep living your life, its not a big deal, it will all straiten out and not really affect you.
                    10 being start shopping for homes in europe, you need to get the hell out of here. We will all be using plastic bottles as shoes in no time.


                    The art of war is simple enough. Find out where your enemy is. Get at him as soon as you can. Strike him as hard as you can, and keep moving on.-Ulysses S. Grant

                    BF2142-|TG-Irr| Steezer

                    CSS- Blood|TG-Irr|

                    Comment


                    • #11
                      Re: bailout fails, stocks crash, now what...

                      Get sticks and marshmellows. Congress will invariably push it through eventually despite overwhelming public opposition. But the actual revolt (and I do mean "nooses and pitchforks") that could possibly spark might deter them awhile anyway. Everyone I know is VIOLENTLY against it without exception.
                      Yet the media keeps throwing out fake polls and crying doom if it isn't passed. Congress.org had a 92%+ against, while at the same time CNN says only 45% were against. I personally could care less if wallstreet burned to the ground and good riddance too. The whole idea of a debt based economy is ludicrous anyway and its about time something crashed and hit folks on the head.
                      While less lucid and reasoned than I would prefer, my blood boils over the whole banking and investment system. What better time to bask in its "pains"?

                      Summed up? If you have your life invested in AAPL or GOOGLE, your screwed... but I see it as a possible boon for the 98% of us who actually work for a living. Prices will go down, the world will keep spinning, its not going to kill anyone I care about (hopefully) and I can always go home thanks to my fiscally responsible family. Oh, and the moneychangers will suffer a minor setback which they will overcome at your expense (theres a down side to everything).

                      Comment


                      • #12
                        Re: bailout fails, stocks crash, now what...

                        Originally posted by RudeBoy View Post
                        We will all be using plastic bottles as shoes in no time.
                        as long as mine have 3 stripes on them Ill be fine with it :row__577:
                        Dizlor


                        Comment


                        • #13
                          Re: bailout fails, stocks crash, now what...

                          Originally posted by MagnaCentipede View Post
                          It's pretty simple:

                          There are people who cannot afford to buy houses. Liberals decide to make themselves look like Good Guys by telling lenders that they should issue loans that they would not issue to they who cannot afford to buy houses, ergo, cannot afford to honor a loan to buy a house.

                          Suddenly, the banks have all these dud loans and the market values of the properties are in the can so forclosure doesn't even break even. This puts investors in a bad position. As far as the bail-out is concerned; passed, it would be somewhere between the Gov becoming even-more-communist and the Gov printing what was it, hundreds of billions of the Uncle Sam Fun Bucks while the signing pen slides across the bill -- bad but more of the same. Halted, the stocks tank (as we saw) because of an instant arctic chill passing through investors because all these banks are going to take it to the chin, and many are made of glass. However, the stocks will likely recover better this way than if the bail-out had driven everyone down via even more inflation than we are already suffering currently.

                          What it means to you is if you have investments, even the "safe" stuff may have taken a hit. The bank market is contracting because the weak herd members are being picked off. If you are employed and financially solvent, carry on citizen; part of your savings account should be in the true sound investments: pickle jars, durables, guns and ammo, quality food, and toilet paper.
                          Magna, as we've already explained in Rince's bailout thread... it's not anywhere close to being this simple. Matter of fact, you can easily say this has NOTHING to do with giving homebuyers loans they couldnt pay.

                          What this has EVERYTHING to do with is Wall Street's ability to make money from nothing. These junk mortgages got flipped a million times until the interest rates were too bloated to support them, all the while the housing bubble was bursting (correcting itself). Simultaneously to all of this they bartered with these notes like candy, collateralizing them to form HUGE transactions (many overseas as well). To make a long story short they tried to turn lead into gold and epic failed. Lead is lead.

                          If it was just a matter of paying back the homeowner it'd be a simple issue. Fact is, the fat cats have already made off with the money and it cant be retrieved w/o the bailout going to Wall Street. ALL of our banks (unless credited overseas like mine, Citibank) are largely insolvent... i.e. they owe more than they actually have... because they've done what I've stated above, or have fallen victim themselves to a bigger fat cat on Wall Street.

                          In answer to the OP:
                          What does this mean for us little guys? Welp, their (the bank's) credit is shot... which means we (the people) cant get any loans w/o the Wall Street bailout. They're not joking when they say "credit will shutdown." It will indeed. This means businesses with too much overhead to remain solvent on a daily basis cant function properly and will have to shrink in size to balance their books.

                          My father is a small businessman. He's okay with the credit market malfunctioning because his business only works on available funds to begin with... mostly due to his workers being independent contractors. Also, his business is largely recession proof (since he feeds off the fat cats directly). So there's always cash to payoff his laborers, plus he's got a lot in reserve.

                          BUT, many businesses (including some small ones) rely on large infusions of cash periodically to pay their bills. These infusions either come from goods/services provided or from credit. If it's credit, obviously it eventually gets paid by goods/services provided. So what happens if credit shuts down?? There's a break in the chain and many businesses cant pay their bills. They have to SHRINK in size to remain solvent enough to pay their bills while there's no cash coming in from providing goods/services.

                          With less money in the system people cut back on BUYING good/services and the cycle gets worse and worse... shrinking businesses and the economy further and further. All of this translates into loss of jobs, weak savings, weak investments, etc.

                          I'll give a better example. I used to work directly for the owners of a popular cruise line. This gave me access to documents most people never see. We ALWAYS had to access lines of credit to pay the bills, it was just a normal way of life. And we employed 1000's of people. To payoff these loans we'd have a good night in the casinos or make a sale on a ship or the tourist season would hit, or perhaps the govt. would give us a tax break, or maybe we'd make a smart investment. But in between these times we lived on credit. PERIOD. Just like most big business does.

                          Who this hurts the most is paycheck to paycheck folks who rely on LARGE companies (like that cruiseline) to keep them employed; meanwhile they're (the employees) in credit debt from cards, mortgages, etc. They themselves are insolvent along with the company that employs them, and indeed the company that loans money to the company that employs them, and on and on. See where this is going? It's bad... real bad. Those companies will have to contract in order to survive.

                          I hope I've explained this well. I've heard a LOT of misinformation coming from people and even "informed" folks from Wall Street.
                          Last edited by Gambit7; 09-30-2008, 02:25 AM.

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                          • #14
                            Re: bailout fails, stocks crash, now what...

                            I’ve been thinking the same thing, Magnum. While I am trying to follow the current events surrounding our economy by watching various segments on television, reading as much as I can about it and even catching the Presidential debate to see what the candidates had to say, I don’t have a real grasp on how it impacts the average American. I’m in my mid-30s with a family and have to say the cost of oil is hurting us more than any credit crunch.

                            Comment


                            • #15
                              Re: bailout fails, stocks crash, now what...

                              bailouts
                              stocks crash
                              ....

                              Profit?



                              Sorry, just injecting some humor. Go about your daily thread topic...
                              "But way back where I come from, we never mean to bother. We don't like to make our passions other peoples' concern." -Dar Williams
                              Former Captain of the 55th Infantry Division

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