Why are so many of you falling for it?
This trillion dollar bailout is nothing more than a ***** power grab by both sides in D.C. to attempt to nationalize the entire Financial Services Sector in this country.
For those of you who will attempt to “dis” my understanding of the economy, I will point out
1)I am self-employed, and won’t lose my job. My mortgage is fixed and very affordable. I don’t have any consumer debt to speak of. So, the bailout will not help me in any way, and it will, potentially damage me to the tune of thousands of dollars in taxes for God-only-knows how long
2)There is no way it stops here. If Washington succeeds in nationalizing the Financial Sector, Automotive, Retail and every other sector will have their hands out to get theirs, and we end up with complete Socialism.
3)My portfolio (and millions of other peoples) has only been negligibly affected by this correction. I would never invest in “air” which is what the Financial Services Sector is – my money is in commodities, transportation and agriculture – real things, that have intrinsic value….they are holding up pretty well. and
4) I remember the ‘87 market correction, which was roughly TWICE as sharp as this drop, IN ONE DAY, and the only thing done was to curb “program trading” (the abuse d’jour in those days), and within a year and a half the market not only recovered but began a long bull market.
This bailout is not necessary. period
Tagged with: Agriculture • Bailout • Commodities
Filed under: Commodity Trading
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You got that right. This bailout is not necessary.
I agree. The bailout is most definitely not neccessary. This has been a long time coming, during the Clinton era they wanted all Americans to have the American dream of owning a home. I am not blaming Clinton, the blame lies with the lending companies that allowed people to take out a mortgage for less money than the lenders had to pay to borrow that money (sub-prime loans) and people were buying homes that both they and the lender knew that they could not afford.
The sub-prime loans were interest only for 5 years then would revert to a regular loan, borrowers though that they could sell and take their equity and then buy a home they could afford. The problem was that the housing market slowed down and your sub-prime loan was a negative amortization, meaning that every time you made a payment you owed more than you did. With a slow real estate market housing costs declined so you are now living in a house that is worth less than what you owe on it and at the same time your sub-prime loan is making the transition to a normal loan and your payment increased.
When people started losing homes to foreclosure, the lending institutions were taking back property that even they could not sell for what was owed on it. Each home they took back caused them to lose money.
Most impacted by this was Fannie Mae and Freddie Mac because they bought these loans for other loan institutions.
We now have a snowball effect as a result. It started with home prices skyrocketing (where I live homes that cost $450,000 went to $750,000 in a year and a half), once these costs get beyond the ability of the average person can afford the prices stall and then start to fall.
I’m not so sure that we have our finger in a dike, it seems to be more like trying to bail water on the Titanic and we all know what happened to the Titanic.
Now we could be headed for a depression, this could be hastened if everyone starts making a run on the banks to get their money before it is all gone. That might be a good thing if it would get housing prices back to the $15,000 they were at when I bought mine and it didn’t last so long that people didn’t starve to death