# People, chill! (financial/economic troubles) **URL:** \ **Category:** The BBQ Pit\ **Created:** [September 18, 2008, 2:16pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144 "2008-09-18T14:16:26Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Enderw24](https://avatars.discourse-cdn.com/v4/letter/e/ba9def/32.png) [@Enderw24](https://boards.straightdope.com/u/Enderw24)\ **Post date:** [September 18, 2008, 3:11pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/21 "2008-09-18T15:11:31Z")
> [@Airman\_Doors\_USAF](#): > > Agreed in every respect, except that “weak” is spelled “week”. Is this the weekly pedantics thread? If not it should be. I think you mean weakly pedantics thread. 🙂 [sub] well it works…[/sub] ---
**Author:** ![jjimm](https://avatars.discourse-cdn.com/v4/letter/j/ba8739/32.png) [@jjimm](https://boards.straightdope.com/u/jjimm)\ **Post date:** [September 18, 2008, 3:27pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/22 "2008-09-18T15:27:58Z")
> [@Airman\_Doors\_USAF](#): > > In a lot of ways the people who are running around in a panic are creating the problem and amplifying it as well. But that’s how it works. ETA: Figure, too, the people who aren’t panicking but are selling short, right to the bottom, and rubbing their hands with glee. ---
**Author:** ![Duke](https://avatars.discourse-cdn.com/v4/letter/d/e8c25b/32.png) [@Duke](https://boards.straightdope.com/u/Duke)\ **Post date:** [September 18, 2008, 3:34pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/23 "2008-09-18T15:34:26Z")
> [@Bosstone](#): > > No, no. The end is Nye. When Bill Nye gets his own show again, that’s the beginning of the Apocalypse. Well there’s your problem, then! Bill Nye did just get his own show again, on that Planet Green network. Planet Green: responsible for the death of Lehman Brothers. It’s all making sense now. ---
**Author:** ![Lightnin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lightnin/32/180_2.png) [@Lightnin](https://boards.straightdope.com/u/Lightnin)\ **Post date:** [September 18, 2008, 3:47pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/24 "2008-09-18T15:47:04Z")
I feel a little guilty, but I just recently drew my money out of my bank. Actually, I’ve been in the process of moving from Wells Fargo to Washington Mutual. It’s not a fast process, what with outstanding checks and direct deposits to keep track of, but I’d already moved my savings over to WaMu. Then everyone here at work started talking about all the trouble WaMu is in: [http://dailybriefing.blogs.fortune.cnn.com/2008/09/10/wamu-whacked-again/](http://dailybriefing.blogs.fortune.cnn.com/2008/09/10/wamu-whacked-again/) (one of many articles) So I started reversing the process- I closed my account at WaMu and took the money back to my still-open Wells Fargo account. I wasn’t the only one there doing that- I counted five other people closing their accounts at the same time. Some were fairly irate. I realize the money’s covered- but at the time, I was looking into buying a house, and I couldn’t take the risk of having that money tied up in any way. ---
**Author:** ![Squink](https://avatars.discourse-cdn.com/v4/letter/s/b5e925/32.png) [@Squink](https://boards.straightdope.com/u/Squink)\ **Post date:** [September 18, 2008, 3:49pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/25 "2008-09-18T15:49:53Z")
> [@jjimm](#): > > But that’s how it works. Another part of it is the legion of happy-talkers that rise up _every_ time there is some sort of real world problem and assure us _ad nauseum_ that the ‘fundamentals’ are sound, regardless of whether they are or not. It’s a high noise system. ---
**Author:** ![The\_Hamster\_King](https://avatars.discourse-cdn.com/v4/letter/t/8edcca/32.png) [@The\_Hamster\_King](https://boards.straightdope.com/u/The_Hamster_King)\ **Post date:** [September 18, 2008, 4:07pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/26 "2008-09-18T16:07:55Z")
> [@RyJae](#): > > This has been coming since the Gramm-Leach-Bliley Act which effectively repealed the safeguards in place since the Great Depression. And to make this relevant the man behind the Act is none other than a top adviser to Sen. McCain (Phil Gramm). You can also thank him for Commodity Futures Modernization Act which also led to some of these failures/bailouts. Yup. The Republicans ripped the speed governor off the locomotive and threw it out the window. Now the train is running off the rails. But oh no we can’t say that it’s their FAULT. Just natural market forces at work. And we all know that the free market is an ABSOLUTE GOOD, so it’s utterly impossible that it could lead to anything bad happening. If it looks like something bad is happening because of the free market that’s just a short term effect and in the long term it will all be tea and cakes! ---
**Author:** ![Jolly\_Roger](https://avatars.discourse-cdn.com/v4/letter/j/91b2a8/32.png) [@Jolly\_Roger](https://boards.straightdope.com/u/Jolly_Roger)\ **Post date:** [September 18, 2008, 4:14pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/27 "2008-09-18T16:14:25Z")
> [@Pochacco](#): > > Yup. The Republicans ripped the speed governor off the locomotive and threw it out the window. Now the train is running off the rails. > > But oh no we can’t say that it’s their FAULT. Just natural market forces at work. And we all know that the free market is an ABSOLUTE GOOD, so it’s utterly impossible that it could lead to anything bad happening. If it looks like something bad is happening because of the free market that’s just a short term effect and in the long term it will all be tea and cakes! I don’t think anyone with two or three brain cells can say its NOT the republicans fault. ---
**Author:** ![bufftabby](https://avatars.discourse-cdn.com/v4/letter/b/77aa72/32.png) [@bufftabby](https://boards.straightdope.com/u/bufftabby)\ **Post date:** [September 18, 2008, 4:20pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/28 "2008-09-18T16:20:05Z")
Hmm. Rent is due in 2 weeks. I have $100 in my bank account, and bills that total more than that. I can’t find a job anywhere in town, not even a shitty one, and I’ve been trying for a month and a half. So why is it that I should “chill out”? ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [September 18, 2008, 4:30pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/29 "2008-09-18T16:30:51Z")
> [@bufftabby](#): > > Hmm. Rent is due in 2 weeks. I have $100 in my bank account, and bills that total more than that. I can’t find a job anywhere in town, not even a shitty one, and I’ve been trying for a month and a half. So why is it that I should “chill out”? Because you aren’t unemployed just because AIG is collapsing. For once, I totally agree with **smiling bandit**. Bush is certainly responsible for the collapse- deregulation always makes the markets more volatile- but all the people running round screaming that “the sky is falling” are making it fall. Runs on banks? Are you fucking serious? ---
**Author:** ![teela\_brown](https://avatars.discourse-cdn.com/v4/letter/t/d9b06d/32.png) [@teela\_brown](https://boards.straightdope.com/u/teela_brown)\ **Post date:** [September 18, 2008, 4:35pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/30 "2008-09-18T16:35:39Z")
I think I can safely hide among the other spelling nitpickers this time. It’s **stock** market, not dtock market. Although “dtock” is a good word for the sound that the market makes when it takes a nosedive and hits bottom. ---
**Author:** ![casdave](https://avatars.discourse-cdn.com/v4/letter/c/c6cbf5/32.png) [@casdave](https://boards.straightdope.com/u/casdave)\ **Post date:** [September 18, 2008, 4:54pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/31 "2008-09-18T16:54:06Z")
The latest one in the UK has been waiting for years to happen, you can’t just keep borrowing to buy assets and hope the underwriters are the only ones likely to catch a cold. We have The Halifax - which was basicly a very large building society - which wanted to free itself up from certain rules such as sources of loan funding and security of assets and instead changed itself into a bank. This meant the original owners, the building society members got a nice payout - so everyyone is happy then. That building society called Halifax, took over Leeds Permanent building society - cue the payouts again, with mega mi££ions handed out to those who had recommended the deal in the first place. As a building society it was incredibly secure, borrowing against its own assets instead of using derivatives, underwriters and all those types of financial instruments. Then Royal Bank of Scotland moved in, and in came poor lending practices, exposures to bad risk. RBS had to borrow very heavily to take over Halifax. They basicly went from a well funded, very safe institution, to near collapse in just 11 years. You also have to remeber that both of these institutions prior to merger were long established, based upon a pretty cautious outlook. Millions of individual citizens have lost money from the share value they were given as payment under de-mutualisation. Llloyds TSB in the meantime has been rather more cautious over the last 11 years. Guess who is now taking over whom ? ---
**Author:** ![ming\_the\_merciless](https://avatars.discourse-cdn.com/v4/letter/m/58956e/32.png) [@ming\_the\_merciless](https://boards.straightdope.com/u/ming_the_merciless)\ **Post date:** [September 18, 2008, 5:16pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/32 "2008-09-18T17:16:26Z")
casdave i think you mean The Bank of Scotland not the Royal Bank of Scotland 😉 ---
**Author:** ![bufftabby](https://avatars.discourse-cdn.com/v4/letter/b/77aa72/32.png) [@bufftabby](https://boards.straightdope.com/u/bufftabby)\ **Post date:** [September 18, 2008, 5:29pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/33 "2008-09-18T17:29:59Z")
> [@Really\_Not\_All\_That\_Bright](#): > > Because you aren’t unemployed just because AIG is collapsing. Ah, well, that fixes everything. I’ll tell my landlord, “Chill out, this has _nothing_ to do with AIG.” She’ll probably even pay my bills then. ---
**Author:** ![Frank](https://avatars.discourse-cdn.com/v4/letter/f/3d9bf3/32.png) [@Frank](https://boards.straightdope.com/u/Frank)\ **Post date:** [September 18, 2008, 5:35pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/34 "2008-09-18T17:35:08Z")
> [@Hentor\_the\_Barbarian](#): > > I prefer to say, “The end is ni. Ni!” Well, you _have_ to. The shrubberies companies have gone belly-up too. ---
**Author:** ![Giraffe](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/giraffe/32/129_2.png) [@Giraffe](https://boards.straightdope.com/u/Giraffe)\ **Post date:** [September 18, 2008, 5:51pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/35 "2008-09-18T17:51:29Z")
> [@Airman\_Doors\_USAF](#): > > In a lot of ways the people who are running around in a panic are creating the problem and amplifying it as well. The financial system is based on confidence. When that goes away we pull perfectly good money away from perfectly sound companies, causing them to fail and making the situation appear even more dire. If you stop and think about it, this is as much an exercise in psychology and sociology as it is in economics. There’s a big difference between confidence and faith. Investments in which people have confidence do well, because there are underlying fundamentals that are sound. So even if some mob psychology causes people to sell it en masse on a rumor, other investors who are aware of the fundamentals will jump on the bargain price. Right now, we have a situation where the underlying fundamentals have been revealed to be far more shaky than people realized, as evidenced by the larger than expected losses throughout the financial sector and the fact that major, respected institutions made bad enough investments that they ended up going bankrupt. That is a big deal. And it won’t be fixed by telling people just to have faith and keep their money where it is. Faith has no place in investing. If solid institutions end up getting undervalued right now, you can bet that will turn around the second institutional investors realize there are bargains to be had. Companies aren’t failing simply because their stock price is dropping. Or if they are, then they should fail, for having such a fundamentally unsound setup. But yes, this isn’t the apocalypse. The market will recover. That doesn’t mean it won’t cause quite a lot of pain along the way, pain which shouldn’t be dismissed so readily by people like the OP. ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [September 18, 2008, 6:00pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/36 "2008-09-18T18:00:03Z")
> [@RyJae](#): > > This has been coming since the Gramm-Leach-Bliley Act which effectively repealed the safeguards in place since the Great Depression. Bear, Merrill, Lehman, Morgan Stanley, and Goldman are all standalone investment banks that did not associate with a commercial bank after GLB. As to AIG, the entity that is tottering is the investment bank holding company; the insurance operations are fine. Without GLB, Merrill and Bear would be failures like Lehman, since being bought by a commercial bank would not have been an option. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [September 18, 2008, 6:01pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/37 "2008-09-18T18:01:37Z")
> [@bufftabby](#): > > Ah, well, that fixes everything. I’ll tell my landlord, “Chill out, this has _nothing_ to do with AIG.” She’ll probably even pay my bills then. Make sure to play the Merill Lynch card too. Look, obviously being unemployed and broke sucks. The OP isn’t talking about the general malaise that’s been hanging over the economy for the last few years, though, but the impending collapse of several figurehead financials- which is what has a lot of people really scared, as opposed to just worried. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 18, 2008, 6:01pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/38 "2008-09-18T18:01:45Z")
> [@smiling\_bandit](#): > > Finally, no, it’s not President Bush’s fault. It’s not really Congress’s fault. It’s not Greenspan’s or Bernanke’s fault. Some people made bad choices which contributed in small ways: several different Republican party and Democrat Congresses, President Clinton, the Fed, yeah. But honestly, none of them made the key critical decisions. And those decisions were not even neccessarily _wrong_, just overly risky. Sometimes, life hands you lemons, and you’ll have to learn to make lemonade or… suck lemons. That they didn’t make the key decisions is exactly the point. Instead of intervening when the problem was small (that would be regulation!) they waited until it was too big to ignore. As for it being no big deal, I’m glad to see that down home Republican empathy at work again. The thousands of financial services workers out on the street might disagree. The people who lost their homes might, as well as those whose home value is under water, even though they are current on their mortgages. Last night I heard both left and right wing economics profs (one a McCain adviser) say that losing 3 of the five major investment banks was indeed a big deal. Isn’t it just amazing how all the bad breaks happen on the watch of the incompetent? Can’t be them, must be just bad luck. ---
**Author:** ![woodstockbirdybird](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/woodstockbirdybird/32/7905_2.png) [@woodstockbirdybird](https://boards.straightdope.com/u/woodstockbirdybird)\ **Post date:** [September 18, 2008, 6:02pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/39 "2008-09-18T18:02:13Z")
> [@bufftabby](#): > > Ah, well, that fixes everything. I’ll tell my landlord, “Chill out, this has _nothing_ to do with AIG.” She’ll probably even pay my bills then. Well, your situation sucks, but it has nothing to do with what’s being discussed in this thread. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 18, 2008, 6:03pm UTC](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144/40 "2008-09-18T18:03:21Z")
> [@FriarTed](#): > > DON’T PANIK! Those letters aren’t large and friendly enough. But your advice is good - same thing I’m doing. Now where’s my towel? [Previous page](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144.md?page=1) [Next page](https://boards.straightdope.com/t/people-chill-financial-economic-troubles/464144.md?page=3)