Market crash: are we there yet ?

[wind_magic]

Originally Posted by Sapperwhite

because there is no official symbol for the Amero yet.....

or will it be 75元?

Maybe it'll end up being Ithica Hours.

[KeelHaulin]

I think those numbers in loan dollars; are what the securities are valued at at maturity. The problem with this is that it is a projected number based on what the loans will yield in expected interest; which is many times more than the principal. When people default on loans the loss is not as much on the principal as it is on what the bank expects to yield on that loan.

The problem is that the home flippers have pumped the real estate market up to the point where the balloon was so over-inflated it did not just deflate; it exploded! The securities are dropping in projected value because each week more people walk away from their mortgages (they don't want to pay for something that is no longer worth what they took a loan for with a zero equity loan). So what these banks want is for the US Gov to "buy" the loss off of them so that their balance sheet stays in the black. The American people know a skunk when they smell one. While I think that something must be done (and if the donation of 700B would have worked I think it should have been done); I don't think American taxpayers should eat the loss.

I think the fed should buy the securities at a value that would assure us a profitable return based on the worst case value (I know this is somewhat unknown). OR; Wall Street should scrape up 50% of the money to spread the risk among investors and taxpayers.

It's almost comical the daily fluctuations of the DOW based on the results of whatever happened in DC that day. It's like the market is saying: "you betta give us the money sucka or we gonna pull the plug". How is it that IF this is such a crisis; the market has not already had it's big downturn? How and why is it "waiting" for us to decide it's fate? Something stinks; and IMHO it goes back to the Fannie/Freddie debacle, corrupt government (both parties), the election (as a distraction), an outgoing president (to sign-off on the 700B payout), and Paulson (who previously worked for Goldman Sachs). Conspiracy theory for a 700B heist?

[artbyjody]

I am no economist - but like some of you folks, I only buy what I have cash in hand for. This "buy-out" should just be sent 9 foot under and forgotten. When the tech sector bombed - there were no bailouts. IN fact the govt taxed even more on the inflated stock values that when they tanked you were responsible for the inflated worth if you sold that stock.


Tech sector bounced back ok... thats free market..

This and that bank is devalued because of what ? Wall Street and a bunch of investors that suddenly go, "ooops", can't afford XMAS this year?.

No thank you on a government bailout - let it run its course. It is way better than having the government have it as a liability (we are already maxed out on credit with the war yes? So where exactly is XXX billion coming from - Monopoly have a overstock sale of funny money?)

Simple economics..


Banks and the mortgage industry didn't loose money on loans of 40K houses... they lost it on those 200K+ houses that they financed to squeeze those into homes and loans, that wanted a bigger house but even on paper could not afford it.

Why? Much more return on bouncing notes around of several hundred thousand... they new it was risky but heck - they got away with it until oil went above $100 a barrel and suddenly cost of goods exponentially went up. The first thing to go is the house and then the cars..


So the problem wasn't just with banks and mortgage companies - it was also with those people that literally allowed themselves to be over extended - and they knew quite well that they couldn't afford the home in most cases.

As taxpayers - it is one thing to blame the companies that grant all this credit freedom (suckerage of wallet), but why should all the taxpayers be responsible for the amiss of those tax payers that allowed themselves to get pushed into homes they knew they could not afford to begin with. The blame goes both ways... and today I am glad that bailout got axed..

[PBzeer]

Rick - Clinton may have made debt payments, but every chart and graph I have looked at shows a steady, rise in actual debt. The only decrease, is debt as a percent of GDP. Still, if you owe, and you have money unspent (as a government entity), shouldn't that money go to debt payment? Or would that be bad business?

[KeelHaulin]

[Rickm505]

Originally Posted by KeelHaulin

I think those numbers in loan dollars; are what the securities are valued at at maturity.

NO. they are loans outstanding. No one has numbers on mature MBS's.

Originally Posted by KeelHaulin

The problem with this is that it is a projected number based on what the loans will yield in expected interest;

No

Originally Posted by KeelHaulin

The problem is that the home flippers have pumped the real estate market up to the point where the balloon was so over-inflated it did not just deflate; it exploded! The securities are dropping in projected value because each week more people walk away.

Yes, this is one of the reasons, but not "the" reason. You left out foreclosures based on losing a job, or based on the monthly payments increasing beyond the means of the people to pay it.

Originally Posted by KeelHaulin

I think the fed should buy the securities at a value that would assure us a profitable return based on the worst case value (I know this is somewhat unknown).

This is exactly what I don't want. It's also why the bill was rejected yesterday. On what basis do you advocate putting this bill on us, the taxpayers? These investment banks reaped huge returns on these MBS's for years, they can eat the pipe on them now. We don't live in Denmark. This is America's free enterprise system.

Originally Posted by KeelHaulin

Something stinks; and IMHO it goes back to the Fannie/Freddie debacle, corrupt government (both parties), the election (as a distraction), an outgoing president (to sign-off on the 700B payout), and Paulson (who previously worked for Goldman Sachs). Conspiracy theory for a 700B heist?

Here you call it a heist. In the last paragraph, you actually advocate the bailout. Which is it??

[chucklesR]

Originally Posted by PBzeer

Rick - Clinton may have made debt payments, but every chart and graph I have looked at shows a steady, rise in actual debt. The only decrease, is debt as a percent of GDP. Still, if you owe, and you have money unspent (as a government entity), shouldn't that money go to debt payment? Or would that be bad business?

John,
It appears that Rick, as usual needs to learn how to use his own tools to produce accurate results instead of estimates and exaggeration again:

Government - Debt to the Penny (Daily History Search Application)

On Jan 1 1999 the debt stood at
5,606,630,290,821.39


On Jan 1 2000, despite the surplus of the year before the debt stood at:
5,776,091,314,225.33

The announced surplus was 122 trillion.
The surplus appears to have been spent on 'dry cleaning'

Fiscal year over Calendar year I understand so don't bother.

Then, a little press conference one year later - a year in which the touted surplus was 230 billion :
President Clinton announces another record budget surplus - September 27, 2000

Jan 1 2001, despite his photo op saying the debt had been reduced by 233 billion (see article above) the debt stood at:
5,728,739,508,558.96 -

Only 48 billion less, how is that possible you ask.
a)

Democrat math.
b) fiscal year as opposed to calendar year?

I go with Democrat math.
the deficit was not reduced by 233 billion on any one day during the year, I dumped it into a database and calculated it out (it's what I do for a living).

BTW, Clinton took office with a deficit of 4.1 and left with 5.7 trillion. Too much of course, but not as bad as it could have been.

Nice try, learn your own tool or show me where I'm wrong.

[PBzeer]

Always enjoy finding someone who thinks like I do

On That Pelosi Speech - Amy Holmes from the Corner on NRO


It seems to me that the real problem with her speech was its illogic. She stridently attacked George Bush's "failed economic policies" and then, in the same breath, implored members to support his most controversial, unprecedented policy, yet.

So, her message was George Bush has been an unmitigated disaster for 8 years. He hasn't gotten one thing right and has plunged America into an economic black hole. But in this case, we need to trust him. Why? Because she says so? They had a huddle?

On what political goodwill was she drawing? The public strongly disapproves of the bailout bill. And to make legislative matters worse, voters have a lower opinion of Congress than a used car dealership. Congressional approval ratings have never been lower.

After eight years of relentless partisan attacks on George Bush, Democrats have not only succeeded in sowing distrust of the administration, but of their own judgment, as well. So, now, when our leaders tell us that we have a genuine crisis, they have no credibility to lead us out. Such are the wages of blind, partisanship. We don't trust what they tell us they see.

[PBzeer]

Hopefully, we now will get an economic solution, rather than a political one.

[retclt]

Originally Posted by PBzeer

Hopefully, we now will get an economic solution, rather than a political one.

No such thing.