Well, it means a 700 point Dow drop, for starters (the largest single-day drop in at least 20 years); there will probably be more extreme drops in the stock markets,
I can't comment on stocks or give advice, but that drop was really just the cattle being spooked by lightening.
Can you speculate on something? Do you think there would've been a drop even if the bailout had passed? I tend to think so.
The bailout bill got sunk because it didn't provide enough protections for American taxpayers and didn't have enough oversight. Your bank just bombed due to some shady dealings that you got away with for almost a decade. Don't be surprised if the people of the country aren't eager to bail your ass out.
In my moderately educated opinion in regards to finance, the taxpayers should also get some benefit long-term for re-investing in the banks. If they succeed with our tax money, we should get something in return. Giving free money to poorly run businesses is stupid, regardless of their importance to the economy.
The market isgoing togo down for a while:people have lost confidence. Would if have lost 700+ points in one day? I'd say no, but 100-300 maybe.
And your estimate is based on wild speculation or facts? If facts, please present them.
It's based on economic theory. Our economy runs on confidence in the market, right now that's in short supply. As for the numbers, guesstimate. I called 300-500 when I heard news about Meryll Lynch and it lost 500 that day. But it's not a "wild speculation" at all.
And why do I have to cite every god damn fucking thing I say? Don't you people have economics in school?
Keep in mind that the market dropped a couple hundred points yesterday BEFORE the vote was taken, when both sides of the aisle were saying that the bill would pass.
Also keep in mind that the fed pumped $630 billion in capital into the market yesterday. Link. If the point of this bill was to recapitalize financial companies with $700 billion, and this was actually done yesterday, why do we need the $700 billion bill?
If $630 billion didn't seem to "restore confidence", why is $700 billion gonna do that?
Flooding the market with cash will only make sure there is enough to cover a run on a bank. It means there are literally 630.B dollar bills in the waiting in case they're needed. They did the same thing on 9/11 to protect against runs on banks then.
The emergency economic stabilization act will buy the bad debt, takings billions of red off the books of the banks allowing them to loan again as normal.
The banks can take the red off their books by stating that the worthless stuff they have is, in fact, worthless.
The bank can look at their balance sheet and say, "these mortgage backed securities that we bought for a dollar are really worth 50 cents, so we'll lower the value in our books to fifty cents."
This would be, of course, taking a loss, which is apparently unacceptable in modern American capitalism.
The Senate is doing a roll-call vote on an amended bail-out bill right now. The amendment was passed 74-25 earlier today and is supposed to appeal to the House reps who rejected the bill earlier this week.
This is a panel that the president of Duke did with a whole bunch of political science/economics professors on the state of the economy this past Wednesday. It's a bit long, but I think pretty informative if you're interested in sitting through it.
I've been following Denninger (the guy in a lot of those videos) for a while. His position is a bit extreme and alarmist, but his reasoning is often sound.
If you believe what Representative Sherman says, then yes, it is true.
For those of you still unclear about what is happening to the economy right this moment, This American Life did another show explaining just that. They do a good job at succinctly summing up the situation (even though Ira has a really annoying voice). It's worth a listen (available here)
For those of you still unclear about what is happening to the economy right this moment, This American Life did another show explaining just that. They do a good job at succinctly summing up the situation (even though Ira has a really annoying voice). It's worth a listen (availablehere)
I'd argue that Ira's voice is no worse than Scott's. :P
Now that the bailout bill has passed what can we expect from Wall street? What effect is this going to have on the crisis? Also, can we ever expect to see any return on that $700 billion or is just money down the drain?
For those of you still unclear about what is happening to the economy right this moment, This American Life did another show explaining just that.
I actually just checked out this thread to post about that. I also didn't really understand the economic situation, until yesterday, when I listened to that episode, and the follow-up episode from this week. Then, last night, I honestly had nightmares about the financial crisis.
Also, on a not-that-related note -- how do you quote someone, when their post is on a previous page? Is it possible? I had to do this one by hand.
Also, on a not-that-related note -- how do you quote someone, when their post is on a previous page? Is it possible? I had to do this one by hand.
It's not that hard to type <blockquote rel="[namehere]">[paste part of post here]</p></div></blockquote>Though I agree, I'd rather just select the to-quote text and hit quote, but meh. The only solution that I know off would be to send the person to a page like the one you get when you edit a post. Downside of that is that you won't be able to quote multiple people without editting the new quotes in after posting.
Comments
And the republicans didn't vote for this cause their constituents don't seem to want it.
In my moderately educated opinion in regards to finance, the taxpayers should also get some benefit long-term for re-investing in the banks. If they succeed with our tax money, we should get something in return. Giving free money to poorly run businesses is stupid, regardless of their importance to the economy.
And why do I have to cite every god damn fucking thing I say? Don't you people have economics in school?
Remember in the other thread when I said this will cause world wide financial chaos and you didn't believe me. Well it has started.
Also keep in mind that the fed pumped $630 billion in capital into the market yesterday.
Link.
If the point of this bill was to recapitalize financial companies with $700 billion, and this was actually done yesterday, why do we need the $700 billion bill?
If $630 billion didn't seem to "restore confidence", why is $700 billion gonna do that?
The emergency economic stabilization act will buy the bad debt, takings billions of red off the books of the banks allowing them to loan again as normal.
The bank can look at their balance sheet and say, "these mortgage backed securities that we bought for a dollar are really worth 50 cents, so we'll lower the value in our books to fifty cents."
This would be, of course, taking a loss, which is apparently unacceptable in modern American capitalism.
If you believe what Representative Sherman says, then yes, it is true.
Edit: I don't know how I missed the most important word in my post
Also, on a not-that-related note -- how do you quote someone, when their post is on a previous page? Is it possible? I had to do this one by hand.
<blockquote rel="[namehere]">[paste part of post here]</p></div></blockquote>Though I agree, I'd rather just select the to-quote text and hit quote, but meh. The only solution that I know off would be to send the person to a page like the one you get when you edit a post. Downside of that is that you won't be able to quote multiple people without editting the new quotes in after posting.