Several threads showed people asking for a dedicated thread on the economic crisis we are in. Bear Sterns is gone. Lehman Brothers is gone. AIG was saved. Who will be left standing? Will CEOs keep bringing in their huge 20 million dollar salaries on your tax dollar? Are people profiting on the losses of others?
What happens if the government does nothing? Is the Senate mistreating public servants like Treasury Secretary Henry Paulson or Federal Reserve Chairman Ben Bernanke? Does the Senate not get it or are they just grand-standing for political reasons?
You asked for it, you got it. All Pearls of wisdom go here.
“The markets are reacting well to the progress being made. In fact, the bulls are charging. It is about time.”
We shall see how long it lasts…plenty of injections into the market before the 1929 crash to prevent it’s fall….
Just some advice: Don’t go spending/borrowing anytime soon.
How long will we be able to bolster the business community…and why should we? I ran a business at one time, and I KNOW that business MUST adhere to the survival of the fittest, and it is government’s responsibility to make sure that ALL are treated equally. There’s nothing fair about how the government has been serving big business to the detriment of everyone else, and that we’re paying for it. They take our jobs away by outsourcing and sending manufacturing offshore. They are at the heart of our illegal alien problem as they attempt to create that cheap labor pool that they enjoy in other countries right here…at the expense of the middle class (which could, in the foreseeable future, become an endangered species). It’s the middle class which is paying for all this serendipity, not the poor (as it should be…we might all be there soon anyway) or the rich…that’s what tax shelters are for.
I’m with you NGL…I’m scared too, and I don’t scare easy.
Moonhowler…
I can’t advise you because I don’t have an investment advisor license. but here is what I have done. Talk to a learned “professor” of economy or a certified CPA before you do anything please…
Read all you can about the great depression, and the economic situation that led up to it. Understand that the President’s advisors have done the same thing, but are dealing with a phenomenon they have never before seen: Massive numbers of “illegal” people (25-40 million of them) began coming into this country from outside the country in the last 20 years and such large numbers created a housing demand “bubble” in the past 5-10 years as these people who were almost ALL illegal at some point in their migration to the US, found creative ways to obtain legal status, establish credit and enter the housing market. This will be the start of all “failure analysis” of this crisis in the future.
Understand that this creates an artificial “boom” a lot like a “gold rush” soon to be followed by a “bust” as soon as the “housing credit resources dry up”. We are in the bust period now, a huge market correction.
I saw this coming 10 years ago, and I began to understand why legislators wanted to create new laws to capatilize on this profitable “loose” credit economic boom, because the demand for credit was extremely high. People who had little money went into great debt at their own peril. Why do you think crazy credit card concepts and mortgage lending ARM concepts and low initial buy-in rates started to get out of control where even Banks were into loan sharking? Because desperate people of limited income and financial stability wanted “glamor” and “wealth” faster than they could legally obtain it, but had typically without “ethnic-centric help” no means to obtain it, except by living paycheck to paycheck and creating an inter-ethnicity black market. This included “illegal alien” people who found “illegal” ways to obtain mortgages, and legal people of common ethnicities helping each other who were recently in the last 10 years “illegal aliens” but had a status change due to sponsorship from employers of the same common ethnicity and others (spouses and relatives) who got them green cards. They found creative ways to live on very small amounts of money and income from minimum wage jobs, by living multiple families to a home, renting homes they purchased to multiple families,and the owner of the home was motivated to do this because he saw enormous personal profit from a perspective of where he “came from”, but did not have any real or deep “safety net”, savings, or long term financial stability in a job. Even though a majority of people who bought homes in the last 10 years, could afford federal reserve artifically lowered rates used to stimulate the housing industry economy, drive politics for a “home” for every person, via section 8A and HUD housing loans at artificially low rates, they could only qualify under very marginal conditions, and typically by falsifying documentation. Many people who had bought a home 15 years ago, allowing its equity to increase, saw a significant difference in the ethnicities of people moving into thier neighborhoods that typically made no sense in how fast it happened, not realizing that many of these people were “cheating” in order to obtain and live in a large home they could barely afford. They did this because the loan officer was typically of the same ethnicity as they were, helped them to falsify records, cheat on income reporting, and helped real estate brokers who lacked financial ethics to sell to people typically of their own ethnicity, and cutting them a “special deal” on fees and helping to encourage them to take the “high risk” of an ARM, with this concept: “you have no fear, because you can sell in two years and make a quick profit, if you don’t since you have not traceable legal status or documentation established in a community, you can default on your loan if necessary and not get caught if you just leave or bail out. Someone else will always buy your home for you.
Well this rapid rise in home sales and price increase due to huge competition for homes lasted until June of last year, then everyones ARMS came due when rates went up, they had no excess income, no job stability and no credit that was not already maxed out to pay bills, fuel and rising food prices. These defaults, being unknow rsik in securities bought by Fannie Mae, Freddie Mac, regular banks, mortgage companies, real estate brokers and investment banks has no idea of the real risk these people who entered the housing market in the last 10 years really represented/ Many had ethics that easily led them bail out and default on their loans, blaming the government for their own high debt figures (10,000-25,000 in consumer debt and 450,000 in mortgage debt.
Such a risky financial ethic, resulted in a collapse of a credit securities market, itself overleaveraged with too much debt to income or federel reserve deposit ratio.
I saw this coming 10 years ago, and put my money into “liquid” capital. Land that I completely own, I bought my house in foreclosure 10 years ago and stayed in it (I almost sold it 2 years ago, but that would have been a mistake), I paid down my mortgage, refinanced twice, paid off my cars, bought vacation homes in distress, diversified my portfolio into Government backed Certificates (Ginne Mae), bought three fishing boats I can rent or sell, learned to fish and find food outdoors (farming and gathering), learned skills and bought tools that others would need in a great depression to create jobs and cottage businesses, and kept relatively safe 401Ks (income funds, money markets and treasuries), heavily invested in Employee Stock ownership plans in the last two companies I worked for (ESOPs), deciding to only work for employee owned companies (the payoffs and growth were huge) and where my company must fail in order to lose money, I took incentive stock options (due 2017) when offered them as incentive bonuses (not on the open market, but private equity investments), put money into IRAs and Insurance Annunities that made steady returns but had low risk, and invested only 25% of my portfolio in Microsoft and Cisco stocks (I failed to sell them soon enough, until the Fed announced the bailout), so they went back up so now temporarily and I must ride it out for 10 years, or sell in about 3 weeks (when the market goes down again as people realize the president is stupid). I put a well on my land, started growing cash crops (christmas trees and grapes) five years ago, and put solar panels on my property to reduce fuel costs. I also bought a hybrid car, and am waiting for the hydrogen’s to come out, where I will buy one within 5 years that can re-fuel off of my solar panels (honda technlogy). I’ve also stockpiled seed, for emergencies that can last for a year, seeds for profit farming again, learned to put up canned goods, cure meat, make cheese, make wine, make beer, and generally doing anything I can to become totally self sufficient (not dependent on money to live, drink, and and eat). I have started orchards, and grow spices, and do general gardening in order to set up a co-op in 3-5 years (i.e. rent my land to other farmers or co-op the existing production).
In the depression, those who were self sufficient survived, those who had professional careers (doctors, laywers, engineers and farmers with land owned) who could create new local and sustanence businesses survived. Bankers who had cash and loans due survived (if they could get people to pay), and renters who had paid off mortgages survived. Everyone with high debt, heavy investment in the stock market, and with low skills (the illegal and labor industries) starved in the great depression.
I thought about buying gold 6 months ago but decided it was not liquid, and was not the same as the 1930s gold based economy, so not really safe. I’ve considered buying foreign paper, but my wife invests in foreign banks, so I am covered if the dollar drops too much, and i considered buying crude oil (I may still), but first I think I’ll put a large kerosene tank on the farm, and maybe take deliveru of some crude, but that strategy will not likely work, unless you can get a lot of it and actually store it, buying paper only, is going to likely wither away in a commodities futures market, because it is only non-securities backed and non-insured paper.
My general attitude is make safe investments, in things that people need in a time of mass poverty, get out of debt, and learn to be self-sufficient, stop buying anything that is “glamor” or “image-based” marketing and egotistical wasteful spending.
Lastly, I politically support getting rid of all “illegals” because they will continue to drag our economy down the toilet, because they have very little wealth to offer and a lot of incentive to steal and cheat that will only ruin future economic recovery and fair competitiveness, and they will form the “masses” of jobless in a depression (just like before in the great depression), causing all of us to compete with them for ant job available.
An economy recovers most quickly when population growth idsslow and steady, not wild and crazy like it is with massive increases in “illegal” population influx.
This is not a time for sympathy. It is a time to cover your own ass…or risk dire consequences in your future wealth.
AWCheny I agree, we need to let the people who made this mess, drown in their own greed and lack of ethics.
Michael, I’m impressed!…and envious. I’d like to be in your far-sighted shoes when the excrement hits the fan! Unfortunately, we’ve had two kids in expensive schools for the past three, going on four, years and my husband’s employment periodically disappears (government contracting, IT). Our savings and investments tend to experience that roller coaster effect.
Michael,
We will all come to your house when we run out of food. Interesting planning. It sounds like you have put a lot of thought into planning for a doomsday scenario. I live in the burbs so no farm stuff can go on here.
Too bad you didn’t buy the gold and silver. I won’t buy it now because of the ‘buy high’ syndrome. I believe in mutual funds and blue chip stock. I may live to eat those words.
I just hope that things get fixed. I don’t think those out in the streets protesting understand the domino effect that no credit has on an enconomy.
This really is no time for politics, IM HO.
Warren Buffett has declared this economic disaster to be the Pearl Harbor of Economic disasters.
I always listen to Warren Buffett. Anyone that rich has to be smart and know something about the economy and how money works.
When there is no credit people lose jobs. Payrolls aren’t met. Pensions dry up. Lines of credit are cut. Loans can be called in. 401ks can become worthless. Be very careful what you wish for.
I don’t want to bail out rich folks either. I also don’t want to live through the Pearl Harbor of Depressions either. It helps to think of it as economic recovery rather than a bail out.
The financial crisis has not yet been solved. It is far more critical than any other issue we could be facing at the moment. Bill Gross, chief investment officer for PIMCO Funds, also weighed in with Warren Buffett in support of the federal rescue.
I admit I was a ‘snotball’ when I was admit that I was upset that a flag other than the American flag was hung on houses and now I wonder if the manassas ice vice minivan team will call zoning if I decide to hang my AMERICAN flag upside down? As a signal of DISTRESS.
Our NATION is in DISTRESS
http://www.youtube.com/watch?v=OGCAm6WQL5M
I will sign this as DOLPH ( my friend that people seem to be using as a weapon of accusations against posters that appear on this or that blog and don’t fall inline)
I am truly having computer problems tonight!!!! It kept FREEZING up( the hour glass would pop up, had to wait, etc..urggg…)trouble on another thread to but I didn’t give up!
Money talk: Agreement reached about midnight. Keep your fingers crossed.