Great Depression Ii

[JAMESBJOHNSON]

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[Safe_Bet]

Bush plans to invest ONE TRILLION dollars in the financial markets to prevent a total collapse of the American-World economy. There is no credit to be had.

This is the same problem the US-World faced in 1929. Every dime of credit was invested in deflated stocks. Today all our money is invested in deflated mortgages and credit card debt.

So here's the question in my mind: How will credit increase if Bush sucks up all the credit to bail out Wall Street thieves?

Some responses are better heard, then read. LINK

 

[R. Richard]

Bush plans to invest ONE TRILLION dollars in the financial markets to prevent a total collapse of the American-World economy. There is no credit to be had.

This is the same problem the US-World faced in 1929. Every dime of credit was invested in deflated stocks. Today all our money is invested in deflated mortgages and credit card debt.

So here's the question in my mind: How will credit increase if Bush sucks up all the credit to bail out Wall Street thieves?

Do the math. ONE TRILLION divided by the population of the US equals $3333.33 per person.

If people invest in worthless stocks, then the money is lost. If people invest in a house, then the situation is a bit different. People have to live somewhere. Thus, a house that's fit for people to live in will eventually have some real value. In the area where I live, its now possible to buy a house for perhaps $50K. Unfortunately, said house is in a very bad part of town and few people wish to live there. There are a few houses, in decent neighborhoods, that are selling for half of what they were worth a year ago, but most of the houses in that sort of neighborhood are now being leased, rather than sold. IMHO, a house where you can live the way you want will always have a reasonable value, as long as you don't have to sell it today.

 

[JAMESBJOHNSON]

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[Selena_Kitt]

The whole charade is a lifeboat for the rich who own bank stock.

And you're surprised because...?

 

[JAMESBJOHNSON]

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[Selena_Kitt]

SELENA

I'm not surprised.

I've always suspected that Bush's idea of helping is to put the average passenger to work making lifeboats for the rich on the TITANIC.

And you really think McCain is going to do something different?

 

[oggbashan]

And you really think McCain is going to do something different?

And our Labour Government (Socialist/Communist according to Amicus) is doing similar things. So is Russia's government.

I don't think Obama would have had much choice either.

Og

 

[JAMESBJOHNSON]

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[Roxanne Appleby]

Bush plans to invest ONE TRILLION dollars in the financial markets to prevent a total collapse of the American-World economy. There is no credit to be had.

This is the same problem the US-World faced in 1929. Every dime of credit was invested in deflated stocks. Today all our money is invested in deflated mortgages and credit card debt.

So here's the question in my mind: How will credit increase if Bush sucks up all the credit to bail out Wall Street thieves?

Do the math. ONE TRILLION divided by the population of the US equals $3333.33 per person.

This is nonsense. Assuming the number is correct, it's 7.6 percent of GDP. It's not an "investment," it's an assumption of debt and assets by deep-pocketed entity (the deepest) which can afford to unload the assets and unwind the liabilities gradually, rather than selling the assets in a rush at fire-sale prices. Unless you think American real estate has zero value, the ultimate cost will be a fraction of "$1 trillion."

How much will the real cost be? Probably 20-30 percent of the whole - $200-$300 billion based on your "$1 trillion" figure. Or, less than half of the amount that Congress increased federal spending last year. Not chopped liver, but chickenfeed in a $13 trillion economy.

Get a grip, JBJ. How many decades have you been proclaiming "The Depression is nigh!" Since around 1975, I'll bet. So, how's that been workin' for you in terms of financial planning?

 

[Selena_Kitt]

SELENA

Where did you get the idea I like McCain? You keep trying to bait me to express support for Bush, McCain, and the GOP.

Peggy Noonan has a good column today: Maybe Neither Candidate Is Right For The Job. I agree.

Once more, for the record: I did not like Reagan, I did not like Bush I, I do not like Bush II. AND the Democrats have run total shit in every election....its why they keep losing.

I just think you're old and cranky and don't like anybody.

So who are you voting for? Nader?

 

[lesbiaphrodite]

The whole business is sickening to me. My response at present is to sit by the lake, look out at the trees, unplug all the televisions and forget. I don't know how long this strategy will work, but it works for now.

 

[DeeZire]

If I had any sense, I'd start up a company making rose-tinted glasses, the kind Rox wears, but I have no faith in free-market capitalism, so I think I'll pass.

 

[gauchecritic]

Prediction: (to be proved instantly wrong gladly)

Within the next 10 years, repeal of two laws.

One. That naturalised Yanqui can become President.

Two. That communications companies can be owned by foreign investors.

The first will give you Arnie for President.

The second will give your economy to China. (they've got your money anyway)

 

[JAMESBJOHNSON]

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[JAMESBJOHNSON]

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[xssve]

The Applebot strikes again.

Read and heed:

Anti-Astroturfing Code of Ethics
Kami Huyse proposes an anti-astroturfing code of ethics and asks for input:

* I will not fabricate a public concern by paying or coercing individuals to falsely act as concerned citizens. I will only seek to help give voice to those who already hold an existing concern and/or provide education to stakeholders that might be affected by a particular issue.
* When supporting grassroots efforts, I will ensure that I am transparent in all my actions and clearly and publicly state what actions I am taking and which organization or client I represent.
* I will never knowingly distort of falsify information to help my client/interest achieve a strategic/emotional advantage in a public debate.
* I will encourage all grassroots supporters to be open and honest in all of their communications, just as I will be open and honest in mine.

 

[Safe_Bet]

Prediction: (to be proved instantly wrong gladly)

Within the next 10 years, repeal of two laws.

One. That naturalised Yanqui can become President.

Two. That communications companies can be owned by foreign investors.

The first will give you Arnie for President.

The second will give your economy to China. (they've got your money anyway)

NEWSFLASH: President Arnold "you can't prove I harassed those women and my Dad was only Sort of a Nazi" Schwarzenegger was inaugurated today, with First Lady "Skelator" at his side (pulling the strings)!

Film at 11:00 by Al Jazeera (symocast in English for the couple of dozen people who don't speak Mandarin yet). Just Fucking Lovely!

Gauche has anybody told you lately that you are evil?

 

[Roxanne Appleby]

ROXANNE

I've been proclaiming DEPRESSION II for 2 years, and for 2 years people have told me I'm nuts. But things keep getting worse.

The present scenario is the same as in 1929. Idiots inflated the price of stock until there wasnt any money or credit to buy it with. Then speculators manipulated a crash by short selling. Many of the stocks had good intrinsic value, just like all the foreclosed homes have good intrinsic value as shelter, but their prices were hyperinflated...creating hyper property taxes and hyper insurance costs, too. People couldnt handle the monthly payments.

Now, as housing prices deflate, state-local government is forced to either raise property tax rates to make-up the decreased revenues OR seriously cut services. Plus many state-local governments bought bundled credit to store excess cash in.

I tell you what, lets have this conversation again in a month, to see where we are. The unemployment numbers are out today: This county went from 5% to 8% unemployed in 30 days.

Some newspapers are characterizing the present debacle as a potential collapse of the economy.

Sorry JBJ, but your fevered speculation lacks any sense of magnitude, scale, perspective, context, etc. There is no resemblence to 1929. Credit-driven asset-value bubbles are not that unusual an event, and in themselves are not necessarily all that troublesome (except for those still on their feet when the music stops).

Ask yourself this: What percentage of the total housing stock in the US is represented by houses bought within the past five years with little or no money down by people who lacked sufficient income to pay the debt? It's a tiny percentage - low single digits. It's certainly enough to get some big finance houses in trouble, especially since the paper on those dicey mortgages is all bundled into securities that also contain the paper on solid loans, and no one can tell how much of those securities is made up of good loans vs. bad ones.

THAT is the real cause of this "crisis," and the reason the markets are so encouraged by a "resolution trust company" scheme to let deep-pocketed Uncle Sam take control of those assets and liaibilites. Uncle has the resources - the main resouce being the luxury of time - to calmly untangle those bundles into good and bad loans, sell the good ones, clear the bad ones, and sell the underlying asset - the homes - at their real market price, which may be 20-40 percent less than their inflated peak value, but is not zero. As I explained in my first post here, unless you think that suddenly American real estate has zero value, this is not a very big deal.

Let me suggest an explanation for your confusion. For a couple years every homeowner in America thought he or she was "rich" because of a few years of double digit home price increases. People who bought their homes for $85,000 in 1994 now thought, "Wow, I'm sitting on a $225,000 asset!" Sorry Charlie - that was a bubble. In real terms your house is worth about what you paid for it - say around $125,000 after inflation.

So JBJ, has our "Charlie" and all the other "Charlies" in America "lost" $100,000? If your answer is yes, then that might explain why you're proclaiming, "The Depression is nigh!" Of course none of those "Charlies" have lost a dime. Their sudden "wealth" was a pure paper gain.

A few Charlies did make money - those who sold their house at the peak, for $175,000 or $225,000. Due to the sloppiness of the lending industry during the bubble some of those buyers were people who didn't have a prayer of servicing those loans. That tiny proportion of the housing stock is what's causing the trouble, and only because their bad loans are bundled in with the good ones, as I explained. It just doesn't amount to very much compared to the value of all the houses and all the mortgages in America, as long as there's no need to work out which is which and liquidate the bad ones within a matter of weeks. That's what an RTC allows, and again, the announcement of one is what the market finds so calming.

 

[Le Jacquelope]

Bush plans to invest ONE TRILLION dollars in the financial markets to prevent a total collapse of the American-World economy. There is no credit to be had.

This is the same problem the US-World faced in 1929. Every dime of credit was invested in deflated stocks. Today all our money is invested in deflated mortgages and credit card debt.

So here's the question in my mind: How will credit increase if Bush sucks up all the credit to bail out Wall Street thieves?

Do the math. ONE TRILLION divided by the population of the US equals $3333.33 per person.

Jesus, dude... that AV is racist. I can't believe you can get away with that. Well, I guess you're online, and you don't get out much...

 

[Roxanne Appleby]

Jesus, dude... that AV is racist. I can't believe you can get away with that. Well, I guess you're online, and you don't get out much...

I don't necessarily disagree, but I wonder if you are willing to explain in precise, explicit terms just what makes that av racist, if it is?

 

[Roxanne Appleby]

The Applebot strikes again.

Gee, XS, are you accusing me of being a bot, presumably created by some super-duper rent-seeking fast-finance house? I think I'm flattered. BTW, how do we know you're not a bot created by Franklin Raines and Fannie?

 

[JAMESBJOHNSON]

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[Selena_Kitt]

The AV was discussed on THE VIEW. The ladies dont like it and it offends them, but it isnt racist.

Actually, the ladies thought it was quite racist.

 

[JAMESBJOHNSON]

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