Market crash: are we there yet ?

[Rickm505]

Originally Posted by Cruisingdad

This is getting a little heated. I would like to urge both sides to take a deep breath. It is a good thread and good debate (from both sides). We are all friends here.- CD

So, I take an evening off heeding your advice and these guys turn my absence into a feeding frenzy.

Sorry CD, I had to respond as the Neocons have escaped from their cages.

[Rickm505]

Originally Posted by wind_magic

Or monetize the debt debasing the currency and causing inflation..

A worthless currency is a choice? Really?

Nah, only Congress would select that one.

[wind_magic]

If we go into a serious bear market, and this isn't one yet, the real problem will be government spending.

The economy basically takes care of itself. If times get tough for consumers, they stop spending, and business cuts back, and it goes round and round, until we end up at some point of equilibrium where most of the excess is gone and then we go back into an expansion. That cycle has played itself out repeatedly throughout our history, and before that in European history, and probably well before that. It's natural, it works.

But government is the problem. Government doesn't have to respond to cries from it's citizens to cut taxes, or cut spending, to relieve the burden on it's populace. Citizens cannot just "stop buying" what the government is selling, we are required to pay taxes based on income, sales taxes, etc, we can't stop that. Starving the government of money doesn't help, it just borrows more, or prints more. There is no effective check on government spending.

Even at the local level, since house prices have started to fall, has your local government cut back on services ? Has it laid off teachers, or made any of the other hard choices that will have to be made if it's coffers empty ? Has your local government even lowered it's appraisals on the property you own to reflect market conditions ? They were more than happy to raise those appraisals when prices were climbing, have they been as quick to lower them ?

Even if government spending levels off or even decreases, so long as it isn't decreasing as fast as the rest of the economy is deflating the government will become an increasingly heavy burden to bear.

The government itself could destroy any chance of a quick recovery ..

[JiffyLube]

Instead of the government just giving money for a bail out, I think the better way is to offer loans to be paid back...like was done with Chrysler...and Chrysler paid back the loan ahead of schedule.

[Rickm505]

For years we've heard Republicans decry the "Tax and Spend" Liberals. Suddenly we discover that we have a new creature facing the high beams of public disclosure.

The spend and "give everyone tax cut Republicans"

The projected budget deficit for this year alone has been raised to $560 Billion before any of these bailouts are added to it.

The Bush administration is setting new records every single year. Need I remind everyone that 6 of those years he had a Republican controlled Congress.

Tomorrow The Senate Banking, Housing, and Urban Affairs is going to hold a hearing where Hank Paulson, Ben Bernanke and Christopher Cox will all testify about the bail outs.

If you can, watch it.

[Stillraining]

Originally Posted by JiffyLube

Instead of the government just giving money for a bail out, I think the better way is to offer loans to be paid back...like was done with Chrysler...and Chrysler paid back the loan ahead of schedule.

Great idea...

[chris_gee]

One point which has been overlooked is that some major firms have overstated their earnings by discounting their borrowings. In other words if I lent you a million (since I don't know you very well) my million is now worth to me say 500,000 but Chuckles and Sailaway each lent me a million so that is discounted in my accounts to 500,000 each. Sorry guys - market economy and have to maintain the share price. Still I am up 500,000 and neither of them are in the mafia.

[wind_magic]

Originally Posted by Rickm505

The Bush administration is setting new records every single year. Need I remind everyone that 6 of those years he had a Republican controlled Congress.

Makes me wish that Obama wasn't going to do the same thing so there would be a choice.

[PBzeer]

Though I should just ignore it, I'll make one last point.

Anyone who has followed any thread concerning politics on this site that doesn't know that the harshest critics of GOP spending have been the so called neo-cons, is either not paying attention, or deliberately ignoring the fact. That they have spent like drunken Democrats is a galling betrayal of surrender to the corrupting influence of politics as usual.

[Rockter]

The London Telegraph stated yesterday that the national Debt of the USA was $11.3 trillion... that's 11.3E12, or $11,300,000,000,000.

There are about 301 million souls in the USA, so each owes $37,541.
If each family averages (say) 4.3 souls, then each family owes $161,428. Interest has to be paid on that, and if it is 5%, then each year your family pays $8071, to someone else. Some of that goes to Lehman Brothers, for this year's bonuses.

In the UK, when pension commitments are factored in... taking it to about 1 trillion £, then the figure here is £15,000 per soul (about $27,000), and each family of 4.3 will owe £66,000, or about $119,000.

Take no lectures from the British as to how to balance the books.

In the UK, unemployment is rising, inflation is rising, and the National Debt is soaring. This year, about £70 billion will be added to it. Throughout the good years, it was ever-increasing. Now, with a recession almost certain, it will increase even faster.

Apparently, it's the "right thing to do".

When will it ever be the "right thing to do" to pay it back, even some of it?

Roll on the election. It's not that far away.

The sub-Prime Minister Brown is going to get anihilated, and his ever-silent hangers-on with him.

Just imagine there guys, the British people can get rid of the lot of them with a wee tick in a wee box on a bit of paper. Happily, Gordon Brown doesn't do the counting on election night.