Stocks Stomped in Financial Freefall

reply to post by tide88


When other countries stop buying our debt our money will be worthless. And since the other countries are the producers of the world and we are the consumers they will come over here with their money after they shake off the bad debt and buy up everything that is worth anything.

reply to post by Telafree


When Lehman Brothers couldn't raise capital fast enough to avoid bankruptcy it was a wake up call to the rest of the banks. Lehman Brothers had part of their debt called in. They suddenly needed to raise capital. The issue wasn't that they were insolvent, as somebody here claimed. The issue was they couldn't find anyone to sell their assets to in order to raise capital fast enough.

Another bank sees Lehman Brothers go under and the question is "who is going to be next?" Lehman Brothers didn't have the capital on hand to pay for the debt that got called in. As a result, other banks start hoarding to avoid a similiar fate. If they are hoarding, they aren't lending.

What results is the credit crisis.

This credit crisis literally effects every single person and business. NO company or person, in the world, can escape its negative effects. That has been shown. Personal credit and loans start to become hard to come by. That means automotive industry, housing market, etc. will continue to drop and fast. That has its own little domino effect. People in those areas of work will see job cuts because the sudden fall in expected revenue in those areas. GM is proof of this.

Now, companies start to feel the credit crunch as well. Companies that rely heavily on credit for day to day operations, OR companies who, during this time of the year, rely heavy on credit to purchase inventory for the holiday season, can no longer get that extra credit. Stores get closed, jobs get cut, and revenue drops.

The longer lending is haulted, the harder the entire market gets hit as a result. The damage you see right now, is a result of less than a month of this credit crunch.

Without any bailout by the government, there is NO reason to believe that lending practices will continue this quater or the next. That is MONTHS of no credit. Credit is the water of business in todays world. You cannot completely just cut them off one day and expect them to adjust.

It is a massive credit drought, and every day that it continues, more damage is inflicted. Expecting the market to work itself out is a huge mistake. This market will work itself out, at the expense of the average person. We cannot begin to imagine what would happen if this credit crisis were allowed to continue unchecked.

The sooner they act on this bailout, the sooner we can get ourselves out of this credit crisis. The sooner we get out of this credit crisis, the less damage WE have to endure. That will give us the chance to correct the instability in the market.

reply to post by Wildbob77


Let us all hope that those mutual funds have been getting out of the risker stocks for sometime now. Hopefully lessening the loses.

reply to post by tide88


Really and your unborn children and grandchildren if you don't have any will be indebted to their necks to the fat pigs managing our financial system before they are even born.

Or where in the heck you think the money is going to come to pay for the increasingly expensive national debt of 1 billion a minute, now at the whopping 10 trillion dollars.

I forgot when the crap hit the fan let the unborn worry bout it.

reply to post by tide88


Another tax on my already strained paycheck is what it is. The governments brilliant idea is to take money away from the people who are already having trouble meeting basic needs & giving it to companies that make a habit out of spending like there's no tomorrow.

Maybe we should all buy stock in the company that makes ramen noodles. I'm betting their sales are up.....

[edit on 9/10/2008 by lynn112]

Originally posted by 2 cents
reply to post by tide88

 

When other countries stop buying our debt our money will be worthless. And since the other countries are the producers of the world and we are the consumers they will come over here with their money after they shake off the bad debt and buy up everything that is worth anything.

My point is other countries will never stop buying our debt. We owe them too much. Also our currency was worthless our government would never allow other countries to come here and buy everything that is worth something. And yes we are consumers. But there are plenty of producers still left in the USA too. There would be WW3 before the USA would allow what you are talking about to happen.

reply to post by grimreaper797


Of course they want the system to fail. Look at this website. Most of the people here fantisize about the destruction of our systems, our governments, our world. They have deluded fantisies about boarding up their houses, stockpiled with food and ammunition, and blowing away anyone trying to steal their supplies. Honestly, I mean look at some of the topics here. They want the end of the world to come because they want to fight through it.

reply to post by TXPatriot38


This is the option I present. Prop up the broken system so we can change it.

This is the option others here present. Let it collapse and hope a brutal dictatorship doesn't come to power.

If you believe that people will not fix the system once proped up, then there is no reason to believe that people won't follow the first nut that promises them a way out of the biggest depression we have ever seen, when we collapse.

Fact, our quality of life is better than ever before. Fact, you take that away in a couple years, and the desperation of people will be unbelievable. When people are desperate, they are easy to manipulate. Germany faced an unimaginable depression, and hitler came from its ashes.

Lets try to avoid the mistakes of the past.

Originally posted by lynn112
reply to post by tide88

 

Another tax on my already strained paycheck is what it is. The governments brilliant idea is to take money away from the people who are already having trouble meeting basic needs & giving it to companies that make a habit out of spending life there's no tomorrow.

Maybe we should all buy stock in the company that makes ramen noodles. I'm betting their sales are up.....

Ok, maybe I am missing something. Where does it say that they are raising your taxes because of this rescue plan.

reply to post by lynn112


Funny how the basic needs of today were yesterdays high life, isn't it? People are just spoiled. The quality of life in the US is incredibly high. There will always be poor, but go take a look at the quality of life for the poor 50 years ago and tell me that life is so horrible.

reply to post by grimreaper797


I understand what you have been saying and you are correct except for one thing. Getting back to business as usual can't achieve anything. It's what got us here in the first place. Give them money and buy the bad assets and then what everything returns to normal? Suddenly the problem goes away? Then we as a nation and people can start borrowing money again? So another bailout can occur at some later time? Robbing peter to pay Paul is not a sound economic system.

What we should have been doing is not having a central banks and having our government borrow the money at interest. We should have kept business and manufacturing here so we can produce real wealth. And save money and live within our means (and that goes for the government as well).

Originally posted by grimreaper797
reply to post by TXPatriot38

 

This is the option I present. Prop up the broken system so we can change it.

This is the option others here present. Let it collapse and hope a brutal dictatorship doesn't come to power.

If you believe that people will not fix the system once proped up, then there is no reason to believe that people won't follow the first nut that promises them a way out of the biggest depression we have ever seen, when we collapse.

Fact, our quality of life is better than ever before. Fact, you take that away in a couple years, and the desperation of people will be unbelievable. When people are desperate, they are easy to manipulate. Germany faced an unimaginable depression, and hitler came from its ashes.

Lets try to avoid the mistakes of the past.

We should of done that a year ago, not now when it's already to late. IMO, It is beyond repair at this point, I don't care what they say anymore, the market is going to fall hard, it is going to last & we are going to suffer.

Propping it up now seems ind of pointless IMO.

I hope your right grim & I hope the hell this bailout turns out to be our salvation, but i just can't find it in myself to put my trust in a government that has screwed me over and over.

reply to post by tide88


We'll see about that. And I don't think we will have to wait long to find out.

Originally posted by grimreaper797
Point is, there won't be any mass starving in the US. Chances are good unemployment won't pass 10%. That less than half of the great depression.

If the Clinton adminsitration hadn't redefined the methodology for colculating the unemployment rate to remove "discouraged" & "marginally attatched" workers from the equation, we'd be challenging the unemployment rate from the beginning of the Great Depression. The official unemployment rate of 6.1& is complete bullcrap. We are in a depression, every single indicator that defines it is in place except for the GDP, which will almost certainly take a huge hit this quarter. Credit is frozen, unemployment is skyrocketing, inflation is knocking, and the government is scrambling.

reply to post by tide88


The money has to come from somewhere.

Sorry about the one liner.



[edit on 9/10/2008 by lynn112]

reply to post by 2 cents


So you are saying that the 2300 points lost in the past 7 days hasn't woken anyone up to the reality of the situation, that our system needs to be changed.

Prop the system up, so that we have the ability to change it. The ability to salvage our quality of life and all the progress we made. Throwing it all away on chance, a slim on at that, is foolish. Anyone who wants a collapse over proping the system up so we can study it and perfect it is as ill willed as the greedy banker. They don't care about the quality of life of everyone else. They don't care about making progress as a country to better our childrens quality of life. All they care about is themselves, and how it matters to them.

They want the entire system to collapse because they are just bitter that while others used it to get ahead, they didn't. There are issues with this system, and we need to salvage it while we have the chance. Prop it up, change it, and create a better tomorrow.

Well, I hope something good comes out from under this mess! President Bush is going to address the nation tomorrow morning..another prop up from him? Who knows...

reply to post by 2 cents


I agree with you. There has to be changes and I think it will come, hopefully. But there was no time to fix the problem first. This had to happen. I was talking to a friend who worked at UBS and he told me I had no idea how bad it was. (and he isnt a government agent) That if the rescue plan didnt pass we were in for some real serious trouble. I asked him if the market would go up on mon (this was sat) and he said the market is going to be down for awhile. However when things start to get implemented you will see it start to pick up. Regardless we are in for some tough times for awhile.

reply to post by grimreaper797

But they will not fix the system they will just continue to put fingers in the leaks that come from it. Fiat monetary systems THROUGHOUT HISTORY do not work. It seems like every time they try it they are saying to themselves "This is the one." I do not understand how a company can operate in the red (having to use credit to sustain themselves) and be considered successful???

And I understand your reference to the German depression. That is always a possibility, but not the ONLY possibility.

reply to post by lynn112


Yea, we borrow it. THat is why the deficit just went up another trillion dollars. They are not going to raise your taxes. Not for a long time anyway.