Maybe but I don’t think so. If they own lots of our debt, they deeply dependent on our success, not our failure. Its kinda like that line about how if you owe the bank one million dollars, the banks owns you. But if you owe the bank 100 million dollars, you own them.
And the market picks up 400 points today.
Out of curiosity, and not being an economic whiz: if the stock market plummets, does that mean the cost of the bailout goes down? Is the stock market seeking to approach a truer value for the can’t-be-valued debt, or are people bailing out because they don’t know how much (or how little) it’s worth and they don’t want to be holding the bag?
See, I can’t help but wonder about this $700 billion pricetag. Are the investors hoping that the price will go down before the government steps in with a trillion dollars? I mean, if you said “I’ll give you some money for whatever is in your pocket,” then the pocket-owner has every reason to inflate the perceived value of the unknown item, right?
I’m not really talking about failure, I’m talking about our foreign policy being dictated by the targets of that same policy. Certainly the world has a vested interest in our success, OTOH, I think they’re fed up with us and our cowboy-kick-ass attitude. If you’re Russia, more directly if you’re Putin being who he is and coming up through the ranks when he did, the chip on your shoulder is huge and your memory about your hatred for the US unshakeable.
Opportunists picking up cheap stocks. Don’t bet on tomorrow being the same.
Hey, is it me or does Tucker Bounds look like Dana Carvey? And why is it that everyone I ever heard of with the name “Tucker” has been a complete dick?
Cheney is Darth Vader. Bush is Dark Helmet.
Money doesn’t trickle down very well. Pain does. jimm’s scenario is exactly what a Berkeley econ prof said today on Forum. Another issue - banks that would commonly roll over loans for good customers might start refusing to. If a bank cuts the loan amount in half, how is the business going to get the money? They have to cut spending, which means laying people off. Stores borrow money to pay for inventory they’ll need for Christmas. If they cut inventory, sales may be cut even more than is going to happen from the crisis.
My question is: how long can we allow the credit market to be frozen before we go over the edge?
The most sensible post in this thread. Particularly the last line. That bailout that just failed, particularly Section 8, was utterly disgraceful and I am very glad indeed that it didn’t pass.
This should be shouted from rooftops, but naturally it won’t. The Republicans were actually planning on blaming the Democrats for the passage of the bill at the same time that they were negotiating with the Democrats over the damned bill! The shiv was out and pointed at Democrats’ backs even while the Republicans were demanding concessions in exchange for votes that they weren’t even going to deliver!
When the hell are Democrats going to learn? Republicans do not “compromise” in anything approaching good faith. Anytime a Republican “compromises” it is a best a stalling tactic and at worst a ruse. Even…especially…in the midst of a crisis. To borrow a phrase, the Republicans would rather lose an economy than miss an opportunity to ratfuck the Democrats.
I know it is fashionable to blame all the world’s ills on the US … and in far too many cases it is even justified.
However, in this case I think you may have misplaced your decimal point. Some rough figures:
World GDP ~ 54 trillion/year
US GDP ~ 14 trillion
Rest of World GDP (excluding US) = 54 - 14 = ~ 40 Trillion
US imports ~ 2.0 trillion
US exports ~ 1.2 trillion
From these, we can calculate:
% of Rest of World’s GDP which is based on “supplying things to Americans” = 2.0/40 = 5%
Not 50%.
5%.
The idea that most of the world’s economy is based on “supplying things to America” is simply not true.
Next, it is worth noting that:
% of American GDP which is based on “supplying things to the Rest of the World” = 1.2/14 = 9%
Finally, it is of interest in this context that the US, with about 5% of the world’s population, produces about 25% of the world’s goods and services. So yes, economic problems in America do affect the global economy.
But not because the economy of the world is based on supplying things to the US …
w.
Count me in the “Glad It Failed” column. Shit, go ahead and put me in the “Wants to See America Under the Bus” column. I’m just self destructive like that. I’d watch it all fall apart for the karmic satisfaction. You wanted capitalism run wild? You got it. Greed is good. The market will take care of everything. Now lie in that bed. I want to see the reaping of what was sown. I’ll feel ripped off if everyone gets away with this.
As for the package and vote … The whole thing stinks of a scam. The history and content of the original pitch, the parallels of the war/patriot act votes, plus RTFirefly’s details… gag me. I don’t doubt that things are fucked up right good, I just see this Fix as a chance for those in power to cover their asses at everyone else’s expense. This might have some effect at stabilizing markets, but only so much as they can do that while first covering their asses. The people who ran the ship into the iceberg are going to be encouraged to continue their behavior. Even if “Something must be done”, we should be doing the exact opposite of what those assholes suggest.
Those pushing this plan are dropping credibility by the minute. The world was supposed to end last week. Cats and dogs living together. There was no time to think. Why am I still here? Why is it possible to take a vacation in the middle of this? Why did the market go way up today? Where is the mushroom cloud?
I remember the recession of the early '90s in the UK, and that’s exactly what happened to a lot of individuals and businesses. Not all of them, not even the majority, but then it wasn’t a depression.
I know I’ll get pilloried as a fingers-in-my-ears naysayer, but my gut feeling is that it’s highly unlikely that even the US economy, let alone the world-wide one, is headed for a full-blown depression right now. Feels more like a bubble-bursting, bump-in-the-road type correction/recession like we had at the beginning of the decade.
I am not an economist, don’t play one on TV, and this is a complete WAG / hunch on my part, but it really feels to me like the Big Players are overdoing the gravity of the situation in order to grab some last minute handouts from the departing administration…
There are banks going under all over Europe at the moment. Nothing to do with the US admin, but everything to do with the situation. It’s pretty serious, and - for once - I don’t doubt the US government’s sincerity.
Sorry if this is a hijack; I’ve never invested in stocks, but I’ve thought about doing this lately. Would it be a be a bad idea to start getting into the market now? Is it going to fall further(yes, please read the future for me), or might it be a good time to buy low?
Would it somehow be morally/ethically wrong to jump in during these times?
Do stock brokers concern themselves over this sort of thing?
Not unless you forced someone to sell. Think of it this way - someone wants to sell, and if you weren’t there wanting to buy, either they couldn’t sell or they’d have to sell for a lower price than you’re offering.
It’s not clear that markets have morals, but no matter, you’re clean in this case.
Okay, so conscience clear; would it still be a bad idea, fiscally, to start getting into the market right now? Would the best time to invest be while everyone is talking doom and gloom? Is it likely to only get worse for all stocks? Or is it the same ‘pre-crisis’ level of risk/reward that has always been there?
If you are running for office, you would find the huge discontent compelling. It is hard to get re elected if you go against the will of the people.
Lets face it. The bill was presented badly. Paulson and Bernanke said over and over that the economy is on a sound foundation, They did it in public over and over. Bush did the same. Then suddenly we have an unforeseen crisis. It comes a month before the election . It gives Paulson ,who has been lying to us , huge authority. We than find he was working on the draft for a few months, while he was saying no problems. This admin has no credibility anyway.
So the people are distrustful. They would be stupid not to be. Many see it as a bailout for the wealthy, the same people who caused and benefited from the mess . We fucked up by not regulating. Paulson made more than 700 million off it. Now we give him a trillion dollars of tax money. His bill exempted him from any oversight, any court or legal problems and he could give any amount of money to any financial institution he wanted to and we could do nothing about it. That bill reeked. It was a horrible starting point ,if that is what it was. Many see it as a new and powerful branch of government being formed that was beyond the reach of laws and regulation. It was crap. It deserved to be rejected. The congressional refusal was a result of the terrible mismanagement of the bailout. Calling it a bailout was stupid for starters. That is not what these guys usually do. It is now being referred to as a rescue America Bill. That will help.