Rolling US Economy Into The Shitbin Thread

http://krugman.blogs.nytimes.com/2008/09/29/bailout-questions-answered/

of course it's impossible that paulson and bernanke can be both self-interested and in the right

see the republicans want this bill but they thought they could trick the democrats into passing it on their lonesome so as to run against it - once theyve realized this wont happen theyll scare up the votes needed

Plus there’s a serious chance of a run on the hedge funds, which could make things a lot worse.

Since we've got no choice in the matter, how about we sit back and watch? The more shrill and terrified people get the more I'm loving this. Bunch of ROK/Japanese time travelers.

they'll scare up some more, but they're gonna make the Dems pay more for it politically, no matter what

of course it's impossible that paulson and bernanke can be both self-interested and in the right

In gabbneb land, amateur hour lasts all day

more zings please

I would also love shrill and terrified people if I didn't think their shrill terror could have a non-negligible impact on my standard of life.

There's a chart at the top of this page.

ok, i will jettison my reliance on krugman to listen to the expert Tombot

voting for this bill wont be nearly as politically costly as conventional wisdom has it (weathervane: gabbneb) particularly w/the dems casting the gop as obstructionists w/no plan of their own

And if you can't do the math on your own yesterday's "record point drop" was about half of the Sept 11th slump and a third of black monday.

dude yesterdays drop was obv just recalculating the chances of of the bailout passing from 99% down to 95%

Since I just found the link to rebalance my 401k YESTERDAY, I am not assuming anyone knows less than I do.

I would also love shrill and terrified people if I didn't think their shrill terror could have a non-negligible impact on my standard of life.

you guys, Mississippi will welcome you with open arms if your finances crater. 2500 sq. ft. for $85,000, available on just about every corner.

yesterday's drop was also rating agencies catching up to the math and causing institutional black boxes to flip the sell switch

but whatever let's turn our financial industry into our automotive and airline industries. beacons of fucking business acumen.

My mind has been traversing from pro-to anti-bailout. Bewitched by the piles of money that can save us but then coming to the conclusion that the 700bn won't even scratch the surface of the contraction in money supply. Time for some hard free market and maybe at the end of it we will get a financial system not based on coked up teenagers screaming at each other.

There is still a real economy out there and it is still working but this is going to hurt if you or your employer relies on credit for cashflow.

Yesterday's drop was due to traders not being rational human beings.

Xpost

ha "turn into"

no dude if the credit markets seize up we all die regardless of who we work for

the just desserts philosophy.

How many generations forward must we mortgage to sustain a standard of living for too many people, one which they don't actually deserve?

Some of the alarmists out there might want to take a moment to consider all the ramifications here. It may sound harsh, but the Great Depression produced many things - one of them was called the Greatest Generation.

The great economic boom of the last few decades propped up by dubious credit has produced a generation or two that thinks enough is never enough and if one can't earn it, than you either borrow it, or the government in the form of hard working taxpayers should make sure you get yours in the end.

I'm no financial expert. I realize that without some plan there will be serious pain. But I also know pain is unavoidable in life. And any government that would have its citizenry believe that isn't the case simply isn't telling them the truth.

Unfortunately, our government hasn't been telling us the truth for decades no matter which party was in control. Maybe it's time that they start. However, assuming they won't, it might not hurt for Americans to at least start telling the truth of the greater issue to themselves.

NO ONE KNOWS WHAT THE BAD DEBTS IS WORTH

― rogermexico., Tuesday, September 30, 2008 11:38 AM (1 hour ago) Bookmark Suggest

If no one knows, then why should we give them money?

Please explain to me how this bailout will affect the life of an average US citizen. Keep in mind that

Between 2006 and 2007, real median household income increased 1.3 percent to a level of $50,233

and that
The median household net worth remained statistically unchanged from 2000 ($58,988) to 2002 ($58,905)

http://www.census.gov/hhes/www/income/medhhinc.html
http://www.census.gov/prod/2008pubs/p70-115.pdf

Some of the alarmists out there might want to take a moment to consider all the ramifications here. It may sound harsh, but the Great Depression produced many things - one of them was called the Greatest Generation.

...all of them gov't employees.

so wait should I stop paying off my credit cards in lieu of armageddon y/n

im told if we have a great depression II, ww III will cure it

GOP now officially off the line that Pelosi bullied them out of the deal, round of applause

The money tree must be refreshed from time to time with the blood of shitty financial institutions. (xp)

xp: or just crap in yr hands and throw it at them.

http://www.ilxor.com/ILX/NewAnswersControllerServlet?boardid=47

Monday's Colbert Report was pretty funny on the whole Reptilian/Illuminati/Secret Religions/Economic Destruction case.

How many generations forward must we mortgage to sustain a standard of living for too many people, one which they don't actually deserve?

Plz to note that this fucktard, among others, argues exactly the opposite of this when it comes to climate change.

OMFG Adam - this isn't about giving "them" money. It's about restoring confidence in a credit market paralyzed by uncertainty.

Are you seriously suggesting there's no connection between the pre-bubble stagnation in HH net worth and the increase in income you're citing precisely during the bubble's grand finale? Is that really just coincidence?

Post 9/11 action by the fed effectively reduced the cost of borrowing money to nil... so per the magic of supply and demand, the markets for goods that are primarily purchased with borrowed money (houses, cars, US and A) went through the roof. And increased demand for the labor to supply them.

That increase in HHI that you note is an EFFECT of the bubble. You're trying to decouple them so that HHI can continue a blithe, cheerful rise while "Wall Street" collapses, but you can't any more than you can decouple waves from the ocean.

JFC... I'm all for public whipping replacing golden parachutes, but "Wall Street" isn't some subterranean cabal of New York bloodsuckers - it's the ground that you're standing on.

Which is to say the average US citizen will see the market for their labor contract significantly.

here's a good little round-up of sobering news.

Which is to say the average US citizen will see the market for their labor contract significantly.

― rogermexico., Tuesday, September 30, 2008 2:14 PM (2 minutes ago) Bookmark Suggest

I know, I lost a 2 1/2 year job this summer, for mostly economic reasons. So I'm not standing on that ground anymore.

I wasn't really trying to emphasize the increase so much as the fact that the median income is $50,000, which is alot less than I was expecting. Those were just the most recent numbers I could find on the census site.

http://upload.wikimedia.org/wikipedia/en/thumb/a/a7/United_States_Income_Distribution_1967-2003.svg/800px-United_States_Income_Distribution_1967-2003.svg.png

I know, I lost a 2 1/2 year job this summer, for mostly economic reasons. So I'm not standing on that ground anymore.

oops. sorry for misunderstanding and being a dick about it. i'm a little riled up today :o

roger, the now-dead bubble allowed the entire world economy to become crazily distorted by the assumption that tens of trillions of dollars of money (in the form of financial paper) had been summoned out of the vasty deeps of the real estate markets and could be spent, respent, leveraged and releveraged until every global transaction became distorted to some extent.

The choices are pretty stark and neither one is good. We can attempt to maintain the illusion that these trillions rest on some measure of value and reflate the bubble, keeping housing prices ballooned at ridiculous values and hope it all turns out ok (hint: it won't) or we can allow tens of trillions of dollars to evaporate out of the system like dew on a sunny morning, causing a global recession as the markets revalue down to earth with a crash.

The first choice will lead to mega inflation, the second choice will lead to deflation and a half-frozen economy similar to the Great Depression. The chances that we'll land somewhere in the middle (stagflation) are slim, but not impossible.

Basically, we're not getting out of this without much pain. Hoping for a better outcome than the ones I've mentioned is unrealistic, insofar as I can see into the murky waters of the financial system and the size of this bubble.

I wish us luck (stagflation). $700bn was probably too little to achieve this end anyway. We'll just have to sit tight and see what the powers that be deliver to us.

In the meantime, my personal finances are in a hunkered-down defensive position and have been for many years.

^^ without reflating the bubble, we can stabilize markets and let some of the fake value leak out in the form of inflation over time (i.e. house prices go down in real terms by holding steady).

best and worst case scenarios?

hahahahaha no one has a fucking clue what's going to happen. I'm so glad "The Road" is coming out this year.

^^ without reflating the bubble, we can stabilize markets and let some of the fake value leak out in the form of inflation over time (i.e. house prices go down in real terms by holding steady).

― rogermexico., Tuesday, September 30, 2008 2:51 PM (13 seconds ago) Bookmark Suggest Ban Permalink

yah thats what usually happens to housing bubbles - the fact that prices are down 15+% is srsly o_O

Armageddon it

If the markets fear that the nays have thrown their toys out of the pram for the long term, the following scenario is quite likely:
* The US stock market tanks. Bank shares collapse...
* CDS spreads for banks explode, as will those of all highly leveraged financial institutions. Credits spreads generally take on loan-shark proportions, even for reputable borrowers...
* No US bank will lend to any other US bank...
* Assets not viewed as toxic before will become unsaleable at any price...
* Banks will stop providing credit to households and to non-financial enterprises.
* Banks will collapse... No bank will be safe, not even the household names...
* Households and non-financial businesses revert to financial autarky, among wide-spread defaults and insolvencies.
* Consumer demand and investment demand collapse. Unemployment shoots up.
* The government suspends all trading in financial stocks until further notice.
* The government nationalises all US banks and other highly leveraged financial institutions...
* We have the Great Depression of the 2010s.

Paulson's fumbles

Which is to say the average US citizen will see the market for their labor contract significantly.

this was already happening over a year ago.

Someone in this bitch is calling you out, Danny P.

I can't believe I'm now on this thread arguing the opposite of the title.
I transferred a big chunk of my MM into my high-growth stock and S&P Index funds last night, hopefully that went through this morning at opening time.

I'll say again I don't believe that only a few centenarian investment houses are capable of providing credit. It's like saying in the eighties that we were going to let America's computer industry die because we didn't bail out DEC and Cray.

I BELIEVE IN A BOLD NEW AGE OF PAYPAL

from comments in marginal revolution:

Those banks which most heeded government demands to make "politically correct" mortgages (Countrywide) vanish.

redlining kept our economy intact for years and years rite

I would like to see Adam's charts regarding wage stagnation in real terms applied logarithmically to reflect the actual amount of people stuck year over year with no raise