Is the Apocalypse apon us ?

[Evildead666]

Is apon a word ?

Seeing the current stock market situation, and the current world situation, are we prime for an apocalypic solution ?

Are we on the brink of Mad Max type society ?

Who is ready for the new world order ?

[Evildead666]

The newspapers for tomorow morning in the uk are basically " Meltdown" and "sell, sell, sell"

Bad news for everyone.

edit : biggest nasdaq drop in history ? ( so says BBC)
even more than in the 30's ?

edit 2 : was the nasdaq around in the 30's ?

[rylan]

Largest point drop for the Dow in history.
Nasdaq drop was 8th largest in points, and 3rd on percentage of 9.1%

The largest Nasdaq drops were 11.4% on Black Monday, October 19, 1987, and the 9.7% drop on April 14, 2000.

[Dr Mordrid]

The 'bailout' was a 150+ page mess of a bill that the leadership made sure no one had a chance to read before putting it up for a vote. In the meantime voters hammered House members of both parties with tens of thousands each of mail, email and phone calls - so many that media reporters couldn't get hold of congressmen for comment.

The people have spoken, and only those in safe seats this fall dared not listen. As it is many of the 40 new Dems elected in '06 are falling behind in their races to more conservative opponents, which is why you saw almost 40% of Dems vote against their own bill.

Fact is this kind of solution is a non solution in that it doesn't solve the underlying problems of liquidity and the structural problems. What needs to be done;

1. instead of bailouts set up a kind of FDIC (federal deposit insurance corporation) to cover banks in trouble. The Feds put up part of the premium to get things started and the rest is funded by premiums from the banks themselves.

2. eliminate the 15% Capital Gains Tax. Untold billions of dollars are tied up in long term investments (bonds etc.) because the investors don't want to pay the capital gains tax when they are cashed out. Remove this anti-growth tax and those dollars can be put to real use.

3. change the real estate valuation rules back to a real value calculated on a 3 year rolling average. Currently the rule is that real estate assets are valued at their current market value, which is depressed, forcing many banks into paper deficits when those assets in the long term would not necessarily show a depressed value - even assets that are not in foreclosure. The current rule is called "mark to market" and while it has advantages in situations like Enron it's killing the mortgage banks.

4. only after the rules and tax changes can we then truly evaluate the value of many assets, and only then should any cash 'bailout' amounts be established.

[rylan]

5. Make Barney Frank take speech lessons

[Dr Mordrid]

6. put Barney Frank, Chuck Schumer and Chris Dodd on the next Delta IV headed for Mars and let them screw up its banking system.

Now for some history - back in 2005 the leadership in Congress tried to reign in Freddy Mac, Fanny May and other GSE's (government sponsored enterprises), basically the crowd that put us in this mess. This is also about the time a certain maverick from the Senate tried the same from his side of the building. The loyal opposition of course opposed and is often the case was able to block enhanced regulation.

YouTube had a video up showing the House committee hearings which put a fine point on who was doing what and when. After todays vote they pulled it down. Why is up for conjecture, but I think it's obvious.

No problem. I had it on my HDD and have put it up here... (40 mb WMV)

IMO which ever side of the current election you're on this video is a must see, especially former president Bill Clinton's analysis at the end.

Yes - some of the titles in the video are tough on the Dems shown, but then to a large degree they deserve it no matter which side of the aisle you're on - especially Barny Frank and Maxine Waters.

If the titles bother you close your eyes between clips as the clips speak quite well for themselves.

[Umfriend]

The 'bailout' was a 150+ page mess of a bill

111 actually. Which should not surprise. What's the avg lengths of bills dealing with 700 bn?

The people have spoken, and only those in safe seats this fall dared not listen. As it is many of the 40 new Dems elected in '06 are falling behind in their races to more conservative opponents, which is why you saw almost 40% of Dems vote against their own bill.

"Their bill"?? That's a laugh. Anyway, just 65 of the 199 Reps went along, far less than with the Dems.

To bad we can't do P&R here but, uhm, your solutions are not structural at all (And take way to long).

[Brian Ellis]

Summed up in a single word:

Greed

Greed of borrowers living beyond their means
Greed of lenders not ensuring sufficient equity on their loans
Greed of incompetent executives with obscene incomes
Greed of even more incompetent ex-executives who require golden parachutes
Greed of politicians who have vested interests, some corrupt
Greed of oil producers/companies making obscene profits

Now it's my turn to be greedy, but my greed will not be satisfied. I have investments in a diversified portfolio, some in US and UK equities which have suffered the double whammy of lost value AND poorer exchange rates, some in various greedy "safe and sure blue chip" bank stocks whose value is now 13% of what we paid for them. Overall, the current value of our investments (not counting cash in bank accounts in several countries) was down by about 35%, as at yesterday morning, probably >40% today. This was set aside in case of emergencies, such as expensive medical treatment or care, which may strike either (or both) of us. Who is going to provide us, old retirees who have worked hard to be independent, with a golden parachute if we need it in a life-or-death emergency? I feel bitter because the US House of Representatives have exacerbated my personal loss situation, through their failure to parachute the US Institutions with a SECURED LOAN to help rectify the situation engendered partly by their own greed, not a gift, just a loan. We pray to God that He takes us rapidly rather than suffer because we can no longer pay for the care we budgeted for in our old age.

[Jammrock]

Brian has it right for sure. I talked to one of my good buddies who's a business wiz about this yesterday, and it was a greed/failure on the bank/mortgage/credit industry for giving the loans, and greed on the borrower's part for taking the money and using it irresponsibly on a home they should have known they could not afford.

And it also boils down to this...either we bail out the banks now and keep them running, or bail out the FDIC later after it fails trying to insure all the failed banks. Either way the taxpayers are going to pay for it, the only question is how bad we will let things get before we do it. The sooner the better I say.

[Kruzin]

Is apon a word ?

No. Upon is a word though.

Other than that, I will not comment, as this is bordering too close to being 'political' .

[az]

Kruzin hit the nails on their respective heads.

[Nowhere]

Brian has it right for sure. I talked to one of my good buddies who's a business wiz about this yesterday, and it was a greed/failure on the bank/mortgage/credit industry for giving the loans, and greed on the borrower's part for taking the money and using it irresponsibly on a home they should have known they could not afford.

And it also boils down to this...either we bail out the banks now and keep them running, or bail out the FDIC later after it fails trying to insure all the failed banks. Either way the taxpayers are going to pay for it, the only question is how bad we will let things get before we do it. The sooner the better I say.

Leaders of the Soviet Union, if it still existed, would be laughing their asses at this...

(that said, I'm sure Castro does )

[cjolley]

Other than that, I will not comment, as this is bordering too close to being 'political' .

Bordering?
If borders worked like that I could claim to be Canadian from here in Oklahoma.



PS I did get a chuckle out of this CNN headline just now:
'DEAD CAT' BOUNCE? DOW UP MORE THAN 200 POINTS IN EARLY TRADING

[Dr Mordrid]

ATM the dead cat is +311 points.

While all the sins above are true enough it's still those facilitators in Congress that let this happen as they set the policy through their actions (or inactions as the case may be).

It's not unlike the party host that puts out 20 bottles of Jack Daniels then denies any responsibility when one of his guests kills 5 people on the way home.

Well...here in Michigan he's on the hook too. So should those congressmen and senators who let the FM's and others run wild with little oversight. Hang 'em all by their nuts IMO.

[cjolley]

ATM the dead cat is +311 points.

Well well, looks like someone out there still has money to invest.

After Bush & Co.'s hair on fire rush into this thing it would be pretty strange if the problem just evaporated on it's own.
Since nobody seems to understand CDSs, including the people who bought them, I guess it's understandable that no one would understand the problems that a collapse of the market for them would cause.