New Bill to be Voted on

[ClakarEQ]

its time to flush the toilet. let who is going to fail, fail and move on.

The potential problem is, you could be the one failing.

[Evermore]

maybe. then it would be up 2 me to fix it.

[ClakarEQ]

aye, personally, being a father of 2, the only "bread winner", the only 401k and investments are all on me. While this bill may not work, and I realize there is a good bit of risk that it won't work, there is no proof that it will fail.

I am confident however that my retirement package will shrink drastically if nothing is done, how long it stays shrunk, or if it will shrink in 5 years even with this bill, who knows.

I think this will be the first year my medium risk "setting" for my 401k will actually lose money.

[ClakarEQ]

maybe. then it would be up 2 me to fix it.

How so? you mean by moving out of the country?

[Tossica]

Pull your money OUT of the stock market and invest in something real. Buy land, buy gold, etc.

[Martrae]

A simplistic explanation of the crisis:

Analogies are never perfect, but here's one using horse racing. Don't expect a perfect correspondence to the banking situation, but I think it is close enough for government work.

Joe goes to the track and bets $2 on a horse.

Two guys standing nearby get into a discussion and Fred says to Sam, "I'll bet you $5 that Joe wins his bet."

Next to them are Bill and Bob. Bill says: "I'll bet you $10 that Fred welshes on his bet if he loses."

Next to them is Sally. Sally says: "For $3 I'll guarantee to Bill that if Bob fails to pay off, I'll make good on the bet."

Sally then goes to Mary and borrows the $7 needed in case she has to ever pay off and promises to pay back $8. She doesn't expect to every have to pay since she believes Bob will always make good. So she expects to net $2 no matter what happens to Joe.

A quick calculation indicates that there is now 2+5+10+3+7 = $27 riding on the outcome of the horse race.

Question how much has been "invested" in the horse race?

Answer:

$50,000 by the owner of the horse who is expecting to recoup his investment from the winnings of the horse and other future deals. Everyone else is gambling, not investing.

The issue with the home market is that the only "investor" was the person who bought the home. All those engaged in the meaningless derivatives spun off from this are gambling. You can see how quickly the face value of all these side bets can exceed the underlying investment. Who is holding these side bets - not the homeowner? It is the people at the failing investment banks, hedge funds and similar enterprises. Notice that the bailout is being directed at them not the homeowners.

The real world is, of course, even more complicated. Over the last 30 years people have been allowed to place bets on everything starting with the value of stock averages. They might as well bet on the temperature in Newark at 8:00 AM.

So when you hear everybody saying this is a crisis caused by the housing collapse, be skeptical. We are in the midst of a classic pyramid or Ponzi scheme and there is no way out except for people to lose a lot of money. All that is different this time is that it is the taxpayers who are being asked for the cash.

[Tossica]

That's actually a great analogy.

If people are LOSING tons of money, you know there are people out there gaining tons of money. The money never really goes anywhere, it just gets shifted to someone else.

[ClakarEQ]

Pull your money OUT of the stock market and invest in something real. Buy land, buy gold, etc.

Ok, and lose 25% of my investment from early withdrawl and taxes?

If I bought land today, there is no promise of that land being worth something tomorrow or even if I'd be able to sell it at all. I will be moving my options into an even less risky area and hope it works out in the end. You'll never (tongue in cheek here) be able to get the type of gains as an individual when compared to the power of quantities.

EDIT
And if the whole thing boils over and goes to shit, at least all us common folk will be in the same shit tank LOL.

If it fails now, or fails 5 years from now from a collapes of the scheme, and Mart I don't disagree with you on that, I will attempt to explain my opinion of how things will go.

The V is a representation of global economies. First it will be a "V", where at the bottom of the valley in that V is the US (i.e. we tank).

Over time, the rest of the world will also tank because we are a critical component of the global economy, the V begins to flatten over time, such that everyone else is brought down to our valley. Once all is "flat", my prediction is that the US begins to swing up again, and overtime the V is flipped upside down ^ with the US at the tip. However this could all go to shit and China or India could be at the tip and the US on a fringed out valley of sorts. Hope that made sense LOL

[Tossica]

Pull your money OUT of the stock market and invest in something real. Buy land, buy gold, etc.

Ok, and lose 25% of my investment from early withdrawl and taxes?

If I bought land today, there is no promise of that land being worth something tomorrow or even if I'd be able to sell it at all. I will be moving my options into an even less risky area and hope it works out in the end. You'll never (tongue in cheek here) be able to get the type of gains as an individual when compared to the power of quantities.

You've already lost 25% I bet. I pulled mine out like 6 months ago when I saw this shit going down. I'm no financial expert but I knew this shit stunk a long time ago.

[ClakarEQ]

Not yet, my losss aren't that bad, not even close to what I'd have to eat if I took it out.

[Eziekial]

Didn't someone start a "buy gold now" post like 2-3 years ago?

[Tikker]

A couple of years ago here when we had our mini crash (aka nortel tanked) the most interesting stuff to come out of it was that you would have more money if you'd spent all your investments to buy beer


the beer bottle/can returns would be worth more at the end of the day than the nortel stock

[KaiineTN]

http://www.bulliondirect.com/index.jsp is a decent place to buy precious metals if anyone wants to consider that, by the way. I haven't bought any yet, but I think it would be kind of cool to own some gold/silver, aside from the whole store of value thing.

[Eziekial]

I've used http://www.usagold.com and I would recommend them.

[Arlos]

Turns out Warren Buffett is for the bailout. Again, I know there's a whole school of economists who are dead set against it, and I respect that. But here's someone who built his firm up from nothing. Class A shares in his company sell for about 130,000 or higher, and I tend to have a lot of respect for his positions on economic matters, especially since he bucks the herd a lot. He actually railed against Bush's tax cuts, saying WTF does he need a tax break for, he's worth billions, that the tax break SHOULD have gone to people like his secretary.

Anyway, here's the link: http://money.cnn.com/2008/10/02/news/ne ... /index.htm

-Arlos

[Tuggan]

of course he's for it, he put 5billion of his own into goldman sachs expecting the bailout to pass.

[Kramer]

if you have $100 mortgages that are worth 20 now, instead of paying 40$ for them and covering the banks ass, i wonder why congress isn't looking to find a lower value for the mortgages and passing the price onto the consumer (say 60$), people would keep their homes, pay off the reduced mortgage

happened with the cost for my 2nd child's birth, if we paid by a certain time we got 33% off the total.....

of course, it seems that when you have a best friend of all the wall street exec's i imagine you aren't interested in keeping people in their homes so much as making your friends fucking rich.

[ClakarEQ]

There was a good blurb on NPR this morning regarding a finance guy from another country saying it would have been better to push some of this cash into foreclosure courts or directly into banks with caveats that it can only be used towards a static interest rate at 5.75% and for the principle for the homeowner would be todays market value of the home.

[Gypsiyee]

http://www.msnbc.msn.com/id/21134540/vp ... 1#27000091\

ok, ok, I know MSNBC leans as far left as Fox does right, but did you guys see this? pretty sneaky to say it during a day when people will be distracted with the VP debates, but how do you urge someone to veto something you yourself voted for?

[Martrae]

Honestly, I'll be surprised if more and more of them don't do the same thing once they have a chance to actually look at the problem and see that this bill is only going to make things worse. They've all been stampeded into voting for this really quickly without proper research. Hopefully, in a couple months they'll reverse it in favor of something useful.

[Martrae]

http://www.cnn.com/video/?JSONLINK=/vid ... n.bill.cnn

[Tossica]

I can't fucking believe banks and wall street just extorted $700B out of us. Once again, I am fucking ashamed.

[Gypsiyee]

well sure, people look back in retrospect down the road and question their decisions because hindsight is 20/20 and all that, but we're not talking about down the road. we're talking about something he's championed and specifically "suspended his campaign" to take care of. he's changed his mind in 4-7 freakin days? a bit erratic and paints his decision as a clearly political one, I'd think. I mean, are we going to bomb a country then 3 days later say "I urge you to unbomb them"?

[Martrae]

Actually, if you listen to the sound bite...he was trying to differentiate between how Congress actually works and how a President should respond. He just didn't do it very well in the time they allotted him.

Basically, he was saying that adding pork to stuff is how Congress does things but the President should veto anything with that much pork.

[Phlegm]

:(


I can't fucking believe banks and wall street just extorted $700B out of us. Once again, I am fucking ashamed.

Plus another $110 billion added pork.