Every day talking heads are babling about the price of Oil, the price of Gold, or Real Estate. or any number of things. These prices go up and down. If you had purchased Oil futures at the top of the speculative bubble, you might have paid $140.00 per barrell. Checking the markets, that future is worth $118.00. So where did the $22.00 go? Well it didnt really go anywhere. It just was not there to begin with. Oh Yes, for the dude who sold you the future, yeah, he made his money. This is called The Bigger Fool Theory. Even if you overpaid, you are still OK if you can find a Bigger Fool to take it off your hands for more money. If you bought your Oil future in December, 2007 at $85.00 per barrel the diference between that and the $140.00 price was $55.00 but now at $118 the spread is $32. where did that lost profit go? Perhaps your home/ condo is not valued at what it was in 2006. It could be worth $50,000.00 less. Where did the $50,000.00 go? Go rent a beachfront house in December for a week, you will pay $300. Rent the exact same house for a week in August and it will be $2,000. It doesent mean that the diference ended up anywhere. It Illustrates that at diferent times and diferent market conditions. assets can experience widely diferent perceptions of value.
So when we hear about the market growing or being sound, that's just a temporary judgement based on widely different perceptions? Nothing is actually growing or sound because it can decrease in value or be totally discounted? So why should we all pay so much attention to it. Shouldn't we invest in actual production of tangible goods and trading of actual services rather than bucking up a system based on air? But actually that difference in the payment for a home in December vs August did end up somewhere it ended up in the pocket of the person that rented the home. And came out of the pocket of the person that occupied the home for that month.
The problem I think is we've sold all of our profits for the August high rents to foreign investors (the prior December) previous to us actually acquiring them and now the value is so low, those foreign investors may call in the notes on our advances of projected profits and no one wants to rent for the August fees let alone even rent this December.
we didn't get into this mess cause of evil rich people, we got into it because stupid people were betting it would keep rising against all reason, they all lost money, rich poor and in between, the appraisers the lenders the borrowers and the traders, now the State wants me to cover their lost "temporarily" until we can convince people the value has risen again, which is not a given The dems are especially pissing me off right now (dodd and frank in particular) I say f*ck em all, why should i have to pay cause they lost their bet?
We thought we could continue to sell a pig in a poke indefinitely. Thing is investors are now opening the bag before they invest and are only willing to pay the value of what they see in the bag. And right now they aren't seeing much of anything they are willing to pay for.
I know that, but that's not a "crises", that's a correction, i say let happen and it's less likely we'll get into this mess again anytime soon
Then you oppose the dems efforts to continue to prop up artificially high values on these assets, and their attempts to cover the main street asses who are just as culpable as the wall street asses?
I kind of agree with you, but this will not just be a crisis, it will be a collapse, and can we all afford to live through a collapse? It shouldn't have been allowed to happen. But it has. I am personally so already collapsed, I don't think it can get worse for me. I'll get by like I have for the last five years. But the US is bankrupt. It's going to be mean hard times and the youth of today weren't raised to live under those circumstances. When road rage is about who cut in on you in traffic, how are they going to respond to losing their shopping privledges?
Your arguement is that my kids and grandkids should inherit a collapse because my generation and the gen x and baby boomers are too spoiled to handle it? lol not convinced, the people alive today created the mess, they should deal with the inevitable consequences, not pass the buck, which what the bailout essential does, just like we do with entitlement programs and the national debt. Pay your own bills boomers!
It's not just the democrats proposing this bailout, I think Secretary Paulson and Bush (Republicans) are also the major players in this end game. What they McCain and House Republicans aren't saying is no one has a cure, they only have a bandaid. And while the citizens are bleeding, they will take their investments safely held in foreign banks and play and endgame on other playing fields. More deregulation and tax breaks aren't going to solve this. The only way the US can dig out of this is to come up with a tangible good or service the rest of the world actually wants to buy. We've sold out our agriculture, our natural resources are so tied to multinational interests they no longer belong to us, we no longer manufacture. We have to take a long hard look at just what exactly we have of value that we can sell, that we haven't already sold.
agreed. Though i will say at the the house repubs are giving lip service to fighting this thing, if Pelosi and Reid get their way, it'd be far higher than 700b, if bush and Paulson get their way foriegn firms get their bad paper paid off by my kids sweat. I say no bailout, and there are some other alternative but they require ripping the bandaid off in one painful swoop. i know the answer to credit card debt isn't to unload it onto yet another card, it's to get a payment plan in order and cut my spending.
We need to look in our closets and see what we can sell on Ebay. The fascinating thing is Cheney observed a few years back the amount of dollars being transferred there and installed taxes and crap to the extent that Ebay is not the world yard sale it used to be.
The House Republicans bought McCain some press time, and they want to deregulate the market further and lower taxes on corporations, for the promise that market will turn around. It's past that point. Corporations owe no loyalty to the US, sure they want more tax breaks, but they aren't going to be lined up to buy risky investments.
See that's where you and i might differ. The market does need to be deregulated and we do need to extend tax breaks to multinationals. Of course those corporations don't owe any loyalty to one nation, why should they? For that reason, why should we bail them out when they make bad moves for their stockholders? i'm not a big believer in protectionism. And we all know that corporations will never have to pay taxes anyway, a raise in their taxes equals a cut in how many they employ and a raise in the cost of their products. Raising taxes isn't an answer to a market problem, getting out of the way of business is. If we try to punish the corporations (publically owned companies that employ anyone not self-employed or on the government dole, companies that also sell us the goods that other people, even still yes other americans make) through tax hikes, the only people hurt are the workers and consumers, not the fat cat on top. If we increase the capital gains tax we also harm those investors interested in putting their money where we need it. The best thing we could do is stand out of the way, and be smarter about who we place our money with and the loans that we take out. this problem started with a bubble cause people got greedy, individuals got greedy. they should pay for the risks they took, you can't negate the consequences you can only spread it, and the bailout just spreads it further longer. I have to agree with the house rebulicans, if you want to plan someone, blame groups like ACORN and people like Dodd and Frank who put "direct action" pressure on the State and on the banks to loan to those who are not financially sound enough to take the risks, then blame the banks and the traders for being so short sighted, but don't blame the system, the system didn't make anyone do anything and the reason no one is going to jail is no one committed criminal fraud, they were just dumb. it did what it's naturally supposed to do, let stupid people make their stupid choices and pay the consequences for it. Borrowers should loose their homes if they borrowed more than they could foreseeably payback, lenders should lose money for over paying for assets they didn't bother to check out or question, traders should lose money for buying packages when they didn't know what was in them, and politicians should lose their jobs for telling the public that there was nothing to worry about and that the bubble was a good thing while it was happening. the only innocent people are the taxpayers being sadled with this 700b debt package. Blame politics and corporatism, not deregulation or the free market (and can someone explain exactly what they mean by that magic word "deregulation" btw). That's my opinion anyway. And will people quit whining about their jobs going oversees, you are not destined to be employed where you are at, it's up to you to invest in yourself and a marketable skill. And it's awfully entho- and/or nationally centric to deny the developing world the opportunity to compete against your lazy ass just cause you're comfortable where you are at. stop being comfortable and start planning ahead. my opinion at least...
Most of my friends never bought into the market. We worked we bought homes, we paid them off, we never were worth more than maybe 6 figures. Our kids will own our homes and many still live in them with our help. The bills we have to pay today are those foisted on us by recent speculators that found wealth without work.
