Flash - Bailout package voted down

[lendaddy]

Right or wrong many businesses NEED a line of credit to operate. It's a buffer that allows us to run the small margins we do. Take away LOC in an unexpected move like this and all hell WILL break loose.

[cstreit]

Originally Posted by charleskieffner

lets do the math..............300 million u.s. citizens. 700 billion dollar bailout.

thats $500,000 dollars per person to bail these clowns out!

Actually it's $2333...

...but I say skip the bailout. I'd rather take the beating now than draw it out and have it be even worse a year from now.

[charleskieffner]

Originally Posted by onewhippedpuppy

Please explain 1 and 2. I live in an area that has experienced 6% yearly real estate appreciation for decades, and have a 20 year fixed rate mortgage with a small conservative local bank (in-house loan). How will this negatively affect me, considering a significant drop in home value is unlikely, and I don't have any worries about my interest rate adjusting?

This entire mess reiterates the classic tortise-hare story. Slow, steady, and conservative sometimes really does win the race.

yep slow steady DOES WIN THE RACE.................time after time.

i too live in a zip code that has not wavered in appreciation.

my credit score is platiniummmmm, like beyond plutonium. last i checked 861.

the only people that are going to be hammered are the ones who stuck their necks way out there.

i too was caught somewhat by the land deals a flying here a few years back. thought about leveraging one piece of property for another and playing monopoly.

but back of my head said "no" what if things change??????????????????

well things have changed...............BIG TIME!

now we are going to watch people that lived on big time credit hang themselves

out to dry! or just hang themselves!

[Heel n Toe]

Originally Posted by charleskieffner

the only people that are going to be hammered are the ones who stuck their necks way out there.

Depends on what you mean by hammered.

If you think unemployment is high now, if it hits the fan, it will skyrocket.

Imagine getting laid off and going to look for a job and all there is is minimum wage stuff. Wanna try to cover your monthly nut on 30-40 hrs. a week of that?

And that's if enough people can still afford to buy fast food that McDonald's even stays open.

A lot more people can get hammered than you think. Including you and me.

[onewhippedpuppy]

Originally Posted by Heel n Toe

Do you think you would be allowed to stay in your home if you lost your job and couldn't make the payments?

Of course not. But you're talking dramatic, Chicken Little worst case. Obviously a lot of other things would go to crap after job loss.

Matteo, I'm picking on you a bit, because I agree with your overall logic. But the impact will greatly vary depending on your location, habits, and financial situation.

[jyl]

We are headed for the biggest global financial crash in most of our lifetimes. Followed by the most economic pain most of us will have ever seen. The chance of avoiding this is getting smaller and smaller.

I hope you guys enjoy it.

At some point, you'll figure out that this is not a spectator sport.

[jyl]

Originally Posted by onewhippedpuppy

Of course not. But you're talking dramatic, Chicken Little worst case. Obviously a lot of other things would go to crap after job loss.

Matteo, I'm picking on you a bit, because I agree with your overall logic. But the impact will greatly vary depending on your location, habits, and financial situation.

And on the financial situation of your employer. Do you know what your employer's balance sheet and liquidity looks like? Do you know what management's contingency plan for a full-blown financial crisis is? How indispensable are you? All pertinent questions.

[kstar]

Originally Posted by jyl

We are headed for the biggest global financial crash in most of our lifetimes. Followed by the most economic pain most of us will have ever seen. The chance of avoiding this is getting smaller and smaller.

I hope you guys enjoy it.

At some point, you'll figure out that this is not a spectator sport.

John,

You're a smart guy, but that's quite a crystal ball you have there, IMHO.

Best,

[Rick Lee]

How in the world will banks be able to kick so many people out of their houses if defaults start to skyrocket? They're already overwhelmed to the point that it can be a year from the time you mail your keys in before the sheriff comes to toss you out. If I lose my job and/or my tenants in VA stop paying, I really don't see what the bank can do to me other than trash my credit score. And if that happened, what would make more sense? Burn through my cash, trying to keep the creditors off my back? Or let it all go to hell and save my cash for essentials like ammo and food?

[onewhippedpuppy]

Originally Posted by jyl

And on the financial situation of your employer. Do you know what your employer's balance sheet and liquidity looks like? Do you know what management's contingency plan for a full-blown financial crisis is? How indispensable are you? All pertinent questions.

Are you saying I should just start looting now?

[Noah930]

Originally Posted by jyl

We are headed for the biggest global financial crash in most of our lifetimes. Followed by the most economic pain most of us will have ever seen. The chance of avoiding this is getting smaller and smaller.

I hope you guys enjoy it.

At some point, you'll figure out that this is not a spectator sport.

Are you fairly confident a "bailout" would avert this type of disaster? What about the fundamental problems of credit that run rampant in our society? We still (as individuals, as well as a country) buy far more things on credit than we can actually afford. For some of us, our homes (and those of our neighbors) still cost far more than what incomes can support. Does infusing 700 billion dollars into the system change that?

I don't mean to be snide or argumentative in those questions. You're a financial guy, and I'm not. But what about opinions, such as those held by guys like Ron Paul, that as painful as this correction will be (sans bailout), it will be far less painful than the resulting depression that will happen if our government prints and distributes $700 billion of cash it doesn't really have?

What's the lesser of the two evils?

[nostatic]

Originally Posted by onewhippedpuppy

Are you saying I should just start looting now?

finally, a financial plan i can get behind

[jyl]

Not my crystal ball. Just look at the financial markets. What are they saying?

Stock markets have plunged to 2004 levels, and decline is accelerating (slope of curve is getting more negative). Technically the SPX has support here, but if broken, next obvious support is 2002 levels. Debt markets look even worse. VIX (implied volatility fear gauge) is at 2002 levels.

Yet market still hasn't given up on the rescue plan. You can see that from the intra-day action. If and when the rescue plan is fully dead, market has lots more room to go down.

I have not given up. I find it very hard to believe that Congress will ultimately refuse to spend 0.5% of GDP upfront to avoid an economic slide that will cost the country far more than that. I think that at some point, Joe Sixpack will finally figure it out - when the pink slips start flying. So I think we will ultimately have a rescue plan, a market recovery, and some chance to limit the economic damage. But a rescue plan when, a recovery from what levels, and limited damage relative to what? From lower levels.

This is something we (the USA) needed to do, the sooner the better. The longer it is delayed, the less effective it will be, the greater the cost, and the more damage in the meantime.

There is another wild card. Which is, what do other countries think of what is going on here? It matters a lot, because if Japan, China, Europe get too scared, and cut back or cease buying Treasuries, then the consequences will be even worse.

[Tishabet]

Originally Posted by kstar

unlike the '29 crash, i would argue there are huge amounts on cash "on the sidelines" as well as a very large number or corporations with no debt.

I believe that credit needs will be filled in many creative, market driven ways by this, so far, "wait and see" cash.

That's how things should work in a capitalistic system, imho.

+1

[jcommin]

I'm just numb over the Congressional vote. The market reacted - probably the purist read of the situation.

I just an average guy like most and this will have an impact on me, my jobmy family and my lifestyle. This is a bad situation with no good alternative. Speaking for myself, I see no recovery for 5 -10 years.

I realize that cash is king but it is uselss when there is nothing to buy because credit is unavailable to businesses and they can't produce the goods and services. Be careful what you wish for - no one knows where this is going.

[jyl]

I'm not going to go through the financial/economic stuff. I've posted a lot about it and you can find lots of information, either read it, or don't.

I'll just point out two things.

First, an analogy that may help understanding.
- Suppose you've got a guy who is extremely obese, weak heart, diabetic, hypertensive, doesn't exercise, etc.
- Would you immediately force him into a sustained regimen of 300 calories/day, no medication, 20 miles/day forced marches?
- Probably not, because you'd have a good chance of killing him.
- Instead, you'd put him on a 1,000 cal/day diet, treat as needed w/ medication, gradually ramp up his exercise.
- Right now, we are headed for the Bataan Death March treatment regimen. If you want the patient to live, better not do that.

Second, suppose you don't know what to think so you need to find someone to listen to.
- In a financial/economic crisis, at least pay attention to what the financial and economic experts think.
- Warren Buffett says the govt needs to step in, he's just the world's most successfull investor. Paul Volcker too, he broke the back of inflation in the 1970s. Bill Gross, who runs more bond money than anyone in the world. Etc, etc. The guys who genuinely know what is going on are pretty darn clear.
- And you're going to counter with Ron Paul? Give me a break. Who's next, Fred Thompson?

Originally Posted by Noah930

Are you fairly confident a "bailout" would avert this type of disaster? What about the fundamental problems of credit that run rampant in our society? We still (as individuals, as well as a country) buy far more things on credit than we can actually afford. For some of us, our homes (and those of our neighbors) still cost far more than what incomes can support. Does infusing 700 billion dollars into the system change that?

I don't mean to be snide or argumentative in those questions. You're a financial guy, and I'm not. But what about opinions, such as those held by guys like Ron Paul, that as painful as this correction will be (sans bailout), it will be far less painful than the resulting depression that will happen if our government prints and distributes $700 billion of cash it doesn't really have?

What's the lesser of the two evils?

[nut11]

Originally Posted by kstar
unlike the '29 crash, i would argue there are huge amounts on cash "on the sidelines" as well as a very large number or corporations with no debt.

I believe that credit needs will be filled in many creative, market driven ways by this, so far, "wait and see" cash.

That's how things should work in a capitalistic system, imho.

+ 100

87 blk coupe

[tabs]

Clyburn (D) of SC and Greg Judd (R) of NH...were almost crying.....

[tabs]

When the children are scared it is up to the parents to reassure thier children. When the parents are arguing so much that they can't reassure their children, the children remain scared....well there is just no telling what might happen now.

[vash]

Originally Posted by charleskieffner

i

the only people that are going to be hammered are the ones who stuck their necks way out there.

i dont understand this. i agree with the other's response. this isnt a spectator's event. i also have great credit...all of it wont mean a thing if companies start to fold, people quit spending, and unemployment spirals out of control. it will be hideous.