Oh my Bucco.....you are making my head spin with all those posts!!! ;)


I don't think I can read them all....couldn't you paraphrase for me? :confused:

There Reaches A Point...
 

,,,in any debate, where the parties can only agree to disagree, I think we're there on this issue.

Based on experience, I attempted to describe what was happening, what was likely to continue to happen, and why. Unfortunately, so far my scenario is playing out accurately. Investors in the U.S. stock market have already lost more than twice the amount of the proposed bailout. They are almost certain to lose a multiple of that more in coming weeks and months. The much larger losers will be American workers and their families and others around the world. There will be a dramatiic slowdown of economic activity, business failures, unemployment, a reforming of the economy around the world. It has begun. This is not debatable. The statistics and anecdotal evidence is overwhelming. But there still is a reasonable chance that further losses--financial, economic and personal--can be lessened. Had the proposed bailout been authorized when proposed there was a chance the economic damage might have been slowed, but probably not avoided because the fundamental economic damage has already been done. If legislation is passed by the U.S. Congress later this week, there still is a chance the damage will be ameliorated. The probability will be lessened because the process of the shutting down of the worldwide credit markets has already begun. The investment of $700 billion, even at this late date, still has a chance of paying reasonable dividends in loss avoidance. But there is no guarantee.

What I have talked about in supporting the distasteful, infuriating investment of public funds is a lessening of the financial damage and a shortening of its duration. What others have talked about here is economic and business theory as well as references to public opinion on the propriety of both those guilty and innocent of causing this problem being beneficiaries of the expenditure of the funds. That theory, criticisms and opinion are worthy of consideration. But unfortunately the description of what is happening and what is likely to happen has been more accurate thus far. The only differences remaining to be determined, based on whether or not the Congress decides to use public funds to create liquidity in the credit markets, are in the depth of the losses, the personal pain people will feel, and the duration of the economic damage.

I have purposely avoided discussion of the undefinable costs associated with the erosion of American influence in world political and financial affairs. But make no mistake, those costs exist as well.

So there's no need to continue the debate. We can wait and see what happens. There should be no satisfaction as the result of who's beliefs turn out to be more accurate because one other thing is an absolute certainty--each and every one of us will be effected. Unfortunately, generations of our progeny will as well.

Then we listen to different people, and the ones I hear (from UnivMaryland & ColumbiaUniv especially) say this is all reaction without common sense.

Perhaps the difference in opinion comes from who will make money out of the "sugar daddy" bailout and who won't. Listening to folk with a vested interest for a cash infusion is like believing the used car sales who says, "Trust me, this is a great car and a steal at this price!"

Opinions And Theories
 

There are certainly opinions and theories on both sides of the bailout proposal. And lots of emotion as well. But where the rubber meets the road is what really happens to the economy. The credit markets have already shut down and the economy will suffer serious damage in the coming weeks and months as the result. Depending on what Congress does and when will determine the extent and duration of the damage. But the damage won't be the least bit theoretical or opinionated. It'll be real...for sure.

Kahuna....either way it goes...bail out or no bail out...Damage regardless?

I'm really interested in which credit markets have shut down? People and companies with decent credit ratings can still get loans. I went car-shopping yesterday and there was no problem, so that market is still alive.

If the shakier credit customers find fewer lenders or higher interest rates, that's the market at work. Who in his right mind lends money to a probable deadbeat?

Perhaps this is an "adjustment" that is necessary because of all the credit fraud, shaky transactions and outright gambles?

Steve, thank you for the your usual balanced, articulate and thoughtful insight.

Your street smarts and avoidance of lofty rhetoric are evident in your "both feet" on the ground observation "Who in his right mind lends money to a probable deadbeat?". Your style is refreshing and appreciated.

Most of the guys I grew up with in Jersey became cops, priests or have had their pictures displayed in the post office. Funny thing, no one welshed on a loan from the post office guys. When the first payment was missed you got a warning, the second you lost a finger, the third they broke your leg with a bat, etc., etc., etc. Most of the loans were paid up by the first etc.

Maybe the government should hire the boys from the old neighborhood and start collecting on those bad loans.

Relax, I'm just kidding.......although.......

Thank you.

The irony is business is business, whether at the street-corner level or in the tallest skyscrapers. The basic rules are the same, and when people try to make it seem more complicated than it is, that's when to watch your wallet.

I totally agree with you both......
 

if this market turmoil teaches us anything, it is everybody just can't have what they want.

I sort of look forward to the old values, personal as well as business.

Remember the days if you had bad credit you didn't get the money.
If you didn't have the money you didn't get it.

I look forward to the end of the vicious incestuous business practices of today.

I will share what a car dealer told me once when I asked how some of the young folks could afford to buy all the new cars. He said, most can't. When we loan them the money at a high interest rate we make money on the car...we make money on the loan....and we make even more money when we repossess the car!!!!!!!!!

BTK

Steve,
I believe from your previous posts that you work for the Federal Government. You are very fortunate in that your job is relatively secure and will probably not be eliminated. Government employees are not the norm as far as most American Workers go. They are not as dependent on the economy and therefore have more job security. If you are able to look beyond your own situation and look at the U.S. Economy as a whole you may be able to understand the fear that many are experiencing reference our economy. Many hard working Americans are in trouble through no fault of their own. They followed the rules worked hard,lived within their means and now they find themselves in a situation they could never imagine, without a job and possibly without a home. I don't have the answers to the current problems, I wish I did but I do know doing nothing is not a solution. Just being tough and telling everyone to suck it up will not work. This is a time when we need the proven (successful) experts on the Economy to work together to do what is best for the country as a whole.

You are correct. I work for the Government - started in April 2004 and will end in April 2009. Came onboard, as did many others from the private sector, because of homeland security issues. So, in that sense, my job is "self-eliminated" in 6 months. Then the commuting between TV and DC ceases.

Prior to that (except for the Army time) is all private sector, running my business and those of others. That includes qualifying for and receiving lines-of-credit for operations flexibility, dealing in currency exchanges (present and futures market), and all of the other business rigamarole to include marketing, personnel matter, cost-and-pricing determinations et al. That 3+ decades of experience as a businessman is why this "credit crunch" stuff makes no sense in the honest marketplace. It also makes me question all of this "panic" mode, as I was taught that panic-buying-or-selling is folly.

From today's mail I shredded three unsolicited credit card applications and two unsolicited "here's checks to go with your credit card" sheets. On the radio I heard commercials for "LendingTree.com" and two banks. On television last night the financial services firms still advertised, telling me how they will make investing so much easier. What credit crunch? ? ?

The reality is not matching up to the hype.

I listened to Sen. Obama's comments regarding the upcoming Senate vote on the bailout/rescue/snowjob as "Think of this like a fire. First you put the fire out, and then you fix the blame."

Sounds really pretty, but most firemen I know what to know what started the fire and what is accellerating it, so they know what to use on it to put it out. Sometimes there really isn't a fire and it's all "smoke" with no impact. Sometimes throwing "water" on it makes things worse, and a different suppression means is necessary. Sometimes you must fight fire with fire to break the cycle.

In this case, these particular politicians want to use money like water, without knowing if that will actually put out any fire or make things worse. That's not too smart at all, but we are supposed to be too dumb to question that.

Not exempt!
 

SteveZ, you're swimming upstream. The credit crunch will touch everyone, including you.

I don't expect a free lunch. I also don't think throwing $700B with no fix to the problem being made at the same time is good business, especially when the money is going to persons-unnamed-at-this-time to be determined by Secretary Paulson at his discretion.

Your guess is that this undefined "credit crunch" - a great buzzphrase if there ever was to cause fear - will cost you, me and everyone else more money. It probably will in higher interest rates to cover even more losses yet to be disclosed due to those who can't or won't live within their means. That may seem like a heartless concept, but I was raised to buy only what I could afford, not what I could get by hoping the collection agent was slow in coming by.

I get a kick when so many people screamed about the President and Congress (yes, they are culpable, too)for going from zero deficit to $9+ Trillion. Yet when these same politicos (who make money from the financial industry lobbyists as we type on this board) whipsaw panic and want a hurried, no discussion, no hearing, no proof, just-trust-me $700B which will be borrowed from China or the Saudis, that's peachy keen.