Stock market tanking

[CosmicCowboy]

Looks like my 6,000 prediction will come sooner than I thought.


No, they market's know that change means turning stocks into penny stocks.


I think my 6,000 is wrong too. I had no idea this president and congress would still be working on more and more bailout packages. As long as the democrats are bent on destroying capitalism to ins ute their Marxism, the markets will keep diving.

Agreed. I now think we are gonna see 5K or less on the Dow and 500 on the S&P. This is gonna get a lot uglier than it should have. They are gonna get their ing change all right.

[CosmicCowboy]

the first mistake is thinking you're safe.

I honestly don't see that armageddon/road warrior situation happening but if it does I'm probably more prepared than most.

Not saying I'm safe, but maybe just more prepared than the average bear. I actually know how to farm and ranch, how to hunt, have the equipment, have the property, and have simple tastes for the most part. Already have the rain water collection system with 10,000 gallons of storage. Also have a fairly shallow well that could easily be converted to solar. The fallback system is there. I know how to smoke meat for safe storage and how to grow and can vegetables. I may not be a navy seal, but I'm a pretty decent shot and in that armageddon type situation if you are within 1/4 mile and I consider you a threat you are dead. It wouldn't be easy and it wouldn't be fun but I hope I could keep my extended family alive.

[pkbpkb81]

the markets are forward thinking.

Obama just tripled the national debt.

And you have the balls to say obama doesn't even have just a little bit to do with this?

your right!

[Marcus Bryant]

I honestly don't see that armageddon/road warrior situation happening but if it does I'm probably more prepared than most.

Not saying I'm safe, but maybe just more prepared than the average bear. I actually know how to farm and ranch, how to hunt, have the equipment, have the property, and have simple tastes for the most part. Already have the rain water collection system with 10,000 gallons of storage. Also have a fairly shallow well that could easily be converted to solar. The fallback system is there. I know how to smoke meat for safe storage and how to grow and can vegetables. I may not be a navy seal, but I'm a pretty decent shot and in that armageddon type situation if you are within 1/4 mile and I consider you a threat you are dead. It wouldn't be easy and it wouldn't be fun but I hope I could keep my extended family alive.

So you're saying I should short the major indices today?

[smeagol]

The last two pages of this thread have been hilarious.

The resident Republicans blaming Obama for the tanking market?

Funny ! So CC, what would have Bush and the Republicans done?

IIRC, Bush was a big proponent and was able to pass the first bailout plan. What makes you think he has a different recepy to solve this crisis than to through money at it? Repubs and Dems approach this problem in the same way.

This reminds me of a year-old thread were I was arguing with Manny about how, IMO, the fate of the American people does not change (substantially) depending on the color of the Government. I see the Repubs addressing the crisis in the exact same way as the Dems are addressing it (and the Dems opposing it in Congress the same way the Repubs are opposing it).

[MannyIsGod]

I know exactly what thread you're talking about and if you think that Obama is doing the exact thing Bush or the GOP would have done then you have not been paying attention at all.

[MannyIsGod]

And for the record I don't believe CC is blaming Obama he just doesn't agree with what he's doing. I don't necessarily agree with him (although I'm not really happy with the treasury department either) but I do see the difference in blaming Obama and just not approving of what he does.

[smeagol]

I know exactly what thread you're talking about and if you think that Obama is doing the exact thing Bush or the GOP would have done then you have not been paying attention at all.

Not the "exact same thing" but the approach is not radically different.

My point in that thread was that the US economy has reached such a degree of development that it goes through natural cylces which do not depend that much on who is in power.

What we are going through is just one more cycle. The problem is that after 25 years of continued growth (with few and feeble recessions in between), the US economy was bound for a big correction.

And one more thing: the blame does not stand with one party or the other.

[TDMVPDPOY]

didnt bush party held alot of seats in the senate when he was in office, which allow them to pass any stupid policys and legislation required.....

[smeagol]

So you're saying I should short the major indices today?

Buy longer dated puts of the Dow and the S&P. June and longer.

Nevertheless, I would wait a while. The market might rebound a little after the beating it took last week and yesterday.

[MannyIsGod]

Not the "exact same thing" but the approach is not radically different.

My point in that thread was that the US economy has reached such a degree of development that it goes through natural cylces which do not depend that much on who is in power.

What we are going through is just one more cycle. The problem is that after 25 years of continued growth (with few and feeble recessions in between), the US economy was bound for a big correction.

And one more thing: the blame does not stand with one party or the other.

This isn't just a cyclical thing. This is the result of incredibly short sighted people in the banking industry leading to irresponsible liabilites without enough covering of their asses. And because the total collapse of our financial system means the total collapse of our society, we all have to foot the ing bill.

Cyclical my ass.

[CosmicCowboy]

This isn't just a cyclical thing. This is the result of incredibly short sighted people in the banking industry leading to irresponsible liabilites without enough covering of their asses. And because the total collapse of our financial system means the total collapse of our society, we all have to foot the ing bill.

Cyclical my ass.

Agreed. This is not a typical cyclical correction. This was the perfect financial storm and both political parties share in the blame. It is the confluence of:

1) Repeal of the Glass- Steagall act (unanimously supported by both parties) allowing regular banks to function as investment banks which made their "books" virtually impossible to value and evaluate by bank regulators.

2) Easy credit policies that were practically mandated by congress and implemented by quasi-governmental agencies (Fannie and Freddie) with absolutely NO congressional oversite. The finger can more easily be pointed at the Democrats on this one because Fannie and Freddie were basically a retirement home for former Clinton administrators and Republicans (including Bush) were calling as early as 5 years ago for more oversight of the ridiculously lax credit standards at Fannie and Freddie.

3) Too easy credit for too long...when a person making minimum wage with outstanding credit card debt and a 600 credit score could walk in to any automobile dealership in town and walk out with a $35,000 automobile financed for 6 or 7 years logic had totally left the system.

4) AIG's default credit swaps. In my opinion this was criminal. An insurance company is supposed to have assets to back up the risks they assume. They were leveraged 30-1+ without a fallback position.

All these issues hitting at once made this one nasty and it could be years before it sorts itself out...at the same time, it is not a valid reason to abandon the democratic/capitalist system for a socialist mother government approach.

[LockBeard]

can't believe you idiots are blaming this on obama, lol

stupid republicans.

Damn chief, don't be blind. You're the pacman champ. Represent.

Obama did not cause this, but he is making it worse. He instills ZERO confidence in business because of his far-left agenda he publicly speaks about even now. Businesses are getting their asses kicked and now they have to worry about strengthened unions, increased taxes, univ. healthcare, and cap-and-trade bull taxes? Obama can't even keep his in his pants long enough to get out of this.

The guy is a business killer. Everyone already knows it. The only people still excited about him are the worker bees who want people to give them honey. The hive doesn't play that .

The problem with far-left ideas is they need hard working Americans to foot the bill. When half the country doesn't want to, when 40% are paying for the other 60%, the system will not work. When you have to keep printing and stealing billions/trillions...

Lots of people simply do not want to live in a European Nanny Weak Country.

[RandomGuy]

When and if Obama ever does anything worthy of praise I will be the first to give him props.

I was going to say "bull ", but I don't really know you well enough to be able to truly assess your "political hack rating", despite what my intuition is telling me.

I will take you at your word, but generally people who make statements like the ones you have given here, would NEVER do so to any Democrat.

We'll see.

[LockBeard]

At the same time, I am very glad McCain is not at the wheel atm haha.

[MannyIsGod]

The Fannie and Freddie lending is a leading GOP talking point but the amount of sub prime lending is much smaller than what was done by private ins utions during the sub prime boom. Fannie and Freddie were put in place to give low income families a shot at owning a home but their regulations were actually stronger than most private ins utions during the boom (03-07).

Its a talking point and nothing more. Private companies ran with the sub prime ball. Not Fannie or Freddie.

[RandomGuy]

Agreed. This is not a typical cyclical correction. This was the perfect financial storm and both political parties share in the blame. It is the confluence of:

1) Repeal of the Glass- Steagall act (unanimously supported by both parties) allowing regular banks to function as investment banks which made their "books" virtually impossible to value and evaluate by bank regulators.

2) Easy credit policies that were practically mandated by congress and implemented by quasi-governmental agencies (Fannie and Freddie) with absolutely NO congressional oversite. The finger can more easily be pointed at the Democrats on this one because Fannie and Freddie were basically a retirement home for former Clinton administrators and Republicans (including Bush) were calling as early as 5 years ago for more oversight of the ridiculously lax credit standards at Fannie and Freddie.

3) Too easy credit for too long...when a person making minimum wage with outstanding credit card debt and a 600 credit score could walk in to any automobile dealership in town and walk out with a $35,000 automobile financed for 6 or 7 years logic had totally left the system.

4) AIG's default credit swaps. In my opinion this was criminal. An insurance company is supposed to have assets to back up the risks they assume. They were leveraged 30-1+ without a fallback position.

All these issues hitting at once made this one nasty and it could be years before it sorts itself out...at the same time, it is not a valid reason to abandon the democratic/capitalist system for a socialist mother government approach.

Ok, now this is better.

I fully agree about AIG's swaps.

Credit default swaps should be treated like insurance, because that is what they are.

As they have been used in practice they are essentially a form of gambling.
"I'll bet that company will default on its bonds."
"Oh yeah, I take that bet."

Either treat it like insurance, and demand solid reserves set aside for losses, or have the Nevada Gaming Commission regulate it.

Lastly though:
Obama has gone to lengths to avoid anything that might be full nationalization, and even tries to avoid the use of the word to keep anyone from thinking that is the administration's intention.

Further, he has stated that the government MUST fully divest itself from the loans/investments that is has made in the process.

Are these the actions of someone who really wants full bore socialism?

[MannyIsGod]

Lots of people simply do not want to live in a European Nanny Weak Country.

Iceland, Norway, Ireland, Netherlands, Sweden, Luxembourg, Switzerland, France, Finland, Denmark and Austria.

Just a few European Nanny Weak Countries with higher standards of living than the United States.

[MannyIsGod]

Ok, now this is better.

I fully agree about AIG's swaps.

Credit default swaps should be treated like insurance, because that is what they are.

As they have been used in practice they are essentially a form of gambling.
"I'll bet that company will default on its bonds."
"Oh yeah, I take that bet."

Either treat it like insurance, and demand solid reserves set aside for losses, or have the Nevada Gaming Commission regulate it.

Lastly though:
Obama has gone to lengths to avoid anything that might be full nationalization, and even tries to avoid the use of the word to keep anyone from thinking that is the administration's intention.

Further, he has stated that the government MUST fully divest itself from the loans/investments that is has made in the process.

Are these the actions of someone who really wants full bore socialism?

A lot of conservatives are actually coming out further on the left on the subject of nationalization. Quite frankly, most of the smarter economic minds keep putting out information in favor of nationalization. The longer we go on and the more money we give these companies the worse they look for not taking that course of action.

[RandomGuy]

The Fannie and Freddie lending is a leading GOP talking point but the amount of sub prime lending is much smaller than what was done by private ins utions during the sub prime boom. Fannie and Freddie were put in place to give low income families a shot at owning a home but their regulations were actually stronger than most private ins utions during the boom (03-07).

Its a talking point and nothing more. Private companies ran with the sub prime ball. Not Fannie or Freddie.

You beat me to it.

Ask him what percentage of all mortgages originated with Fannie and Freddie during the last 10 years.

If the "Fannie and Freddie are mostly to blame" schtick holds any water, the number should be more than 50%.

I have a rough idea as to what the % is, and you can bet it isn't anywhere near being a majority.

But since it isn't my claim, it is Cosmic Cowboys', he should be able to back up his statement by showing that the two organizations were responsible for a pretty sizable chunk of the mortgage market.

If he can't, then he has pretty much done just as you say, i.e. aped a hollow, useless, politicallly motivated talking point at the expense of a comprehensive and realistic view of the mess.

I will give it a day or so, and maybe he can support that statement.

[MannyIsGod]

I know he can't support the statement. The data has been out there for months now. Yet you still see the same talking point (or internet meme) regurgitated time and time again.

Actually - to be fair I don't even think its a GOP talking point. It really is more of an internet meme than anything else. It just gets repeated time and time again. I guess its possible its something you hear on talk radio but I don't know since I don't listen to that crap.

[RandomGuy]

A lot of conservatives are actually coming out further on the left on the subject of nationalization. Quite frankly, most of the smarter economic minds keep putting out information in favor of nationalization. The longer we go on and the more money we give these companies the worse they look for not taking that course of action.

It is really a damned if you do, damned if you don't.

Either we as a society suck up (socialize) the losses through our government, then try to recoup those losses with a resale, or

We as a society suck up (socialize) the losses through free-market, chaotic collapses of the responsible ins utions, as well as bear all of the collateral damage from the fear-based abandonment/flight of capital from any related business.

Everybody WILL end up footing the bill in one way or another.

The big problem now is that NO ONE knows the full extent of the losses, because we have lacked the political will to suck it up and really coldly evaluate it.

Until we do something about definitively valuing those assets, we will be stuck in half-assed limbo of not knowing whose assets are worth a and whose aren't. THAT is really one of the most fundamental contributing factors to our current problem that would be solved by having the government step in in some way and buying assets.

[CosmicCowboy]

Manny, you are playing word games now. I really thought you were smarter than that. The mortgages were flipped to Fannie and Freddie even if they weren't originated by Fannie and Freddie. The lenders like Countrywide were encouraged by Fannie and Freddie to go find more with a "wink wink" just write em and we'll buy em culture. It may be fashionable to call them "predatory lenders" but in every transaction there was a willing buyer and a willing seller. What was missing was responsible lending oversight to determine if the buyer really had the ability and desire to pay.

[RandomGuy]

Iceland, Norway, Ireland, Netherlands, Sweden, Luxembourg, Switzerland, France, Finland, Denmark and Austria.

Just a few European Nanny Weak Countries with higher standards of living than the United States.

Personally, I have seriously considered moving to one of those countries to work.

If I were one of those countries, and all of them have low or negative birth rates, I would be advertising the fact that everybody has health insurance of some sort in my country to the tens of millions of skilled US workers who don't.

At some point, Americans will realize what price they really are paying for a lack of a social safety net, and either we will provide that net, or there is a fair chance that countries that DO offer that security will find themselves the beneficiaries of a brain drain from the US.

[RandomGuy]

Manny, you are playing word games now. I really thought you were smarter than that. The mortgages were flipped to Fannie and Freddie even if they weren't originated by Fannie and Freddie. The lenders like Countrywide were encouraged by Fannie and Freddie to go find more with a "wink wink" just write em and we'll buy em culture. It may be fashionable to call them "predatory lenders" but in every transaction there was a willing buyer and a willing seller. What was missing was responsible lending oversight to determine if the buyer really had the ability and desire to pay.

Indeed they were flipped to Fannie and Freddie.

The question still remains though.

What percentage of the total bonds securitized by mortgages originated with Fannie and Freddie over the last 10 years?