WHO CARES if these banks and the market fail...?!!!

I am poor, will still be poor tomorrow, still be poor next week...I don't see this changing anytime soon.

I have yet to hear anyone spell out in REAL terms what his means to me if we just tell these bastards to fuck off and take it like a man, if they wanted to gamble, let them lose. LET THEM !!!!

Bailout my ASS...we are not being heard, for all our emails, faxes, protests...the "negotiations" are continuing and there WILL be a bailout...


SO WHAT WOULD REALLY HAPPEN if there WASN'T one? I heard that the banks, etc will not be able to lend, the market will crash, etc...
but how does this look ON THE GROUND? really?

Will my grocery store close its doors and stop selling food by next week? will the gas stations close? How insolvent is EVERYTHING if this is the true consequences? I just don't get it.

Meanwhile, as the government debates how to rape & pillage our future generations, I am quietly going to the bank today and removing everything but one dollar from my acounts. I would rather have it in my pocket....all $100 dollars of my life savings....

and then I have to buy groceries and pay bills, so I guess I will be out of money by tomorow anyway...

oh well....canned beans anyone?

Will grocery stores be affected- you bet they will. Gas stations? quite possibly.

Fact is, no one knows what the ramifications would be, because its unprecidented- but I can guarantee it wouldn't be good for anyone- rich or poor.

I just think this is all smoke and mirrors... if the world market and everything else is so fucking instable, then maybe it all SHOULD just be llowed to crumble so it can be rebuilt on REAL value...whatever happened to living within our means?

If I can get by with only what I have in my pocket...then these greedy mothers should be forced to understand that concept too!!!!
:mad:

to get by with what's in your pocket...and neither will you be able to replenish the little supply you have...

sP

...you know how he is with the english language.

:rofl: :rofl: :rofl: :rofl:

mother is 71 and blind, father is 76 and crippled. They scrimped and saved all their lives and have a small savings in the bank that is now in jeopardy. They are not young enough and healthy enough to ever replace this money. We have good genes--and on both sides of the family have had several people live to nearly 100.

I don't have much money in the bank either--but am not self-centered enough to think that the world should revolve around my needs. The government has to protect ALL the folks.

mom and a local said that obviously they got hit and if they played not his problem

to be very cautious with their small savings--they have it all in low yield but low risk investments and they have to watch every dime. If the economy goes down a lot of good people are going down with it.

it upsets me a lot when I hear our side talking as cold and callously as the other side.

I hope your parents are OK.

why we cannot let the economy crash

What is going on is a combo

1.-Anger
2.- ignorance

Combine those two... and you see what you see

40 years........that includes 401K's, retirement, pensions.........

position. I just wish that if they HAD to do this, they would do three things. 1) Make it a loan at 5% higher than what we will borrow it at. 2) put a .25 tax on every transaction made from now on 3) cut out the golden parachutes and make no salaries higher than the highest paid government official.

I would then sign on willingly.

fuck everyone else...yeah, there's no 'i got mine' in there...but the jist of it is the same...

sP

lol...I am not trying to sound republican, and have NEVER been a fan of them or their policies. I am just tired of struggling ALL the time and now being told my children will carry this burden because of these greedy fuckers.

Working two jobs and raising 3 kids alone has not been easy, and I know if things got worse it would be critical for me and them, we may not survive...but this mess is just BULLSHIT and I want to cash in my chips (the few I have) and say fuck it to all this crap.

Do you think MY credit matters to these asses? not

even though in a roundabout way. i am sorry you see it as slander...feel free to sue me. i know it sucks...and the people who did this (private and the public sector enablers) should be tarred and feathered and then locked away until they can pay back every dime.

and it isn't about YOUR credit...it is about banks lending to other banks that allows you to hold $100 in your pocket...cause without that intraday lending you cannot cash a check and you cannot make a withdrawal and cannot hope for an ATM. if there is no bailout here (of some form or other) the banks cannot trust each other to payback even intraday loans and then it ALL comes tumbling down a la 1929...

sP

Credit is the devil, that is part of the reason for this mess...

Real money no longer exists, it is all just numbers on a screen or in a system...

but that cash in my pocket has some value for today at least, and after I buy groceries for my kids, we are broke again. That's real.

it just makes no sense to me for the world to worklike this... I guess I am just a hippie who would rather barter than deal in play money...

Gold isn't real money. Money itself isn't really, the only tangible forms of wealth are things like your food, your computer, the energy you use and the roof over your head.

Credit is not the devil, it is just a system for renting money and it works remarkably well most of the time. The problem in your case is that you can't think of any way to make money, so you have no interest in renting it. And indeed, that's true for a lot of people. Having a credit card to buy groceries with is foolish (unless it's there as an emergency system). Having credit to invest in productivity is extremely sensible. It CAN be sensible to buy groceries with it IF you have a job and using a credit and paying it off every month means you can put more money in your savings account.

So you're a hippy. Suppose, for argument's sake, that you like sewing and other people like your clothes. clothes are something of real value. OK, so you could make money by selling them...but first you need a sewing machine and you have no cash. Buy it with a credit card, and you can get to making and selling the clothes which lets you pay off the credit, problem solved. This is a wise and sensible use of credit.

I am not rich and I understand more than you think about what's it's like to have little or no money for food. But the fact that it makes no sense to you doesn't mean it's wrong, just that you've run into something about which you're ignorant. Which is perfectly OK...what I am saying is that you can wrap your head around it, it just takes some time. If you choose to stay ignorant of it, that's your choice, but when this happens again in 20 or 30 years time you won't see it coming. And in the meantime, you won't be able to advise your kids on how to handle money etc.

but banks have to have these little credit markets (believe it or not the overnight/intraday credit is one of the most important bits to us little guys). someone here posted an excellent essay on how these intraday loans work and why they are necessary. A huge part of that is that these intraday loans are necessary because you cannot physically move (even in the digital realm) all that money around between banks and the millions of transactions a day...you have to write all these millions of little loans (when you cash a check at your bank, when it is drawn on another, the banks keep a tally that amounts to a loan and then settle up at the end of the day...rather than trying to settle each transaction independently).

it DOES make a difference if the banks cannot count on these intraday loans...the whole system is predicated on them...

sP

...it is all just " do this or else"

I haven't been able to understand the "or else"

I am sorry for those who are losing their life savings and have more to lose from this awfulness...I don't mean to be selfish...

but the spin is incredible here...it all about the economy cratering, and no real tangible reasoning

I suggest going down to the library every week (or making friends with someone who has a subscription) and starting to read the Economist or the Financial Times. Yeah, it'll take a year or two before all the business and finance articles begin to make sense but it's worth it.

Those who call you republican should be taking "personal responsibility" for themselves and not expecting everyone else in this country to bail them out. Isn't "personal responsibility" one of the memes the rethuglicans love to spew? :puke: So let them pick up the tab for it.

Make no mistake, the people that want this bail out are the ones that have a vested interest in the stock market. They would rather cling to a broken and corrupt system rather than get rid it and the rat bastards running it and start anew.

Not only that, but paying the 700 Billion blackmail off does NOT guarantee that there won't be a crash in a month or two or that the Great Depression 2 isn't just around the corner.

NO.

All the bailout does is allow the gamblers to keep on gambling while WE all pay for it, even though we shouldn't have to, don't want to and can't afford to. :grr:

I agree, that this is just blackmail and we are being sold another war-bill...

AND there is NO PROOF that this stupidity won't prevent the meltdown from happening in another few months, weeks, or a year...either way I agree, it is time to revamp the whole system. Unfortunately humans are bad at retooling things...we usually NEED some kind of complete breakdown before we get to thinking about how to rebuild it better...

We are on the edge of a precipice...but perhaps the fall isn't as bad as everyone thinks either?

I worked my ass off to get my education (while working most of the time) and then I worked my ass off in my profession. And I did so despite increasingly difficult physical conditions as MS made it more and more difficult over the years to work full-time, but I kept at it. I finally retired a little early when I felt I had enough savings to live off of without having to rely on disability or any other government program (until I hit social security, which I'm damn well taking!). Believe me, I'll apply for disability if I feel I need to but at this point, I still don't have to. So yeah, I care a great deal and I'm frankly getting tired of people blowing off the importance to us who are called "rich" or whatever because we have savings and a lot to lose.

I too worked my ass off to get an education and to pay for it by working at pizza joints, etc. My family and I have scrimped and saved for 25 years now in order to be able to invest some of our money for our future and retirement. I am the one that always volunteers to stay late at work and on weekends when something needs to be done. My newest vehicle is a 2000 model pick-up truck. I have over 265,000 miles on my '94 Geo I drive to work. NO vacations, NO new clothes, etc. I am my own mechanic, electrician, plumber...you name it. I too am tired of people saying "let it crash", just because a lot of them have nothing to lose, and a lot of us have worked like hell to get what little we have.

'I worked my ass off and it worked for me,' implying, because we've all heard it explicitly said so many times before, that if you simply work harder it will work for you too. So obviously, you're not working hard enough.

Sorry, that's not how it works out here in the mass reality. Money trickles up, and punishments trickle down. People work their asses off, get paid minimum wage with a boss that constantly tells them how stupid they are and how lazy they are, and they never do get ahead! They believe that the Myth of Rags to Riches will work for them too, so they work and scrimp and work and scrimp and take the bosses punishments, the thousand mental cuts of the knife without complaining, and then in the end they get ripped off by any one of a number of mechanisms, apparently up to and including the government taking more tax dollars to support Corporate Welfare so the country club elite set can still play golf then afterward sip martinis and gaze wistfully at the sunset while joking with their cronies about the next scam for the zillion dollar score.

I'm so glad the system worked you. Realize that for most it was nothing but endless broken promises.

Why have such disdain for this poster? You have issues.

The poster wasn't talking rags to riches. Good grief. Get a grip.

I'll presume that is what you are referring to as "lamely attempting to criticize".

Rags to riches was referring to a metaphor we all were probably exposed to when we were younger in school, and the poster referred to education, a place where many of us suffered extreme punishments, part of the "broken promises" I mentioned. And yes, the poster referred to themselves as rich!

Nor am I rich -- far from it. I live on a tight budget and I stick to it. Not that it's any of your fucking business but I love in a modest house worth less than $200 K before recent devaluations (significantly under the national average and even more under the local average) which I have paid off through hard work -- since when is that a fucking crime? I drive a simple Honda which I also paid off, also through hard work. I planned ahead, worked my ass off and lived within my means and all of a sudden I'm a Republican. You make assumptions that I'm rich based on what? That I was able to save enough money and invest it wisely enough that, if I live carefully and simply and cut out all frills I can make it....that makes me rich? I scrimped while I was working -- I saved everything I could and didn't spend on anything that wasn't absolutely necessary -- I thank my grandfather who lived through the Depression for drilling that into my head and I give myself credit for listening. If "the system" hasn't worked for you well, that's not my fault and you need to quit blaming your circumstances on other people or lashing out at them because they MADE "the system" work for them.

And I, too, suffered "extreme punishments" in school -- school was a nightmare for me when I was a kid. it was enough of a nightmare that I dropped out for a couple of years because I HATED school-- I finally got a clue and went back -- I MADE that happen. I made a conscious choice for my own well being -- get past it and get the damn education. I got over it and got a great education and ended up loving school later in life because I got past the early traumas from school. If you weren't able to move past whatever happened to you, THAT'S NOT MY FAULT! Jesus.

It seems I correctly summarized your thoughts in my prior post to you, my typo must have been a Freudian slip of the sub- or super-consciousness.

You got yours, so just keep the corrupt system of punishment going because a few figured out how to work it, and since you did, everyone else should fit into the same corrupt system. (upon reread and edit, I realize this is another republican meme)

But never, never allow the corporations be responsible for their own mistakes, only people themselves!

Yes, you did refer to yourself as "rich" and with savings that you want to protect! In one post you wrote

• "importance to us who are called "rich" or whatever because we have savings and a lot to lose,"

and in another one,

• "I never once referred to myself as rich".

It's class conflict baby, and you're now a liar. I try my best not to take advice from liars!

I never called myself rich -- I said other people were referring to those of us with something to lose here as "rich." Do you see the word CALLED there? There's a VAST difference there. Who says I don't want to hold corporations accountable? You're inserting things here that I simply haven't said. As I've said elsewhere, I haven't even made up my mind about the bailout -- I'm trying to keep an open mind, read everything intelligent that people post, read a wide spectrum of economists weighing in on this issue and figure out what's best for the people who have the most to lose, and that would be both you and me. Those who think they don't have anything to lose if we crash are wrong, but that doesn't mean that the bailout is right. And I never said I have mine and fuck everyone else, nor have I ever thought that. That's what YOU'VE pretty much said -- I DON'T have it so fuck everyone who does.

you're trying to make because of the modifiers in the clause following it, "because we have savings and a lot to lose". The "rich", the truly uber rich, apparently have a lot to lose, and you included your situation in that construct. Perhaps it was simply a poorly written sentence. We all write them from time to time.

This is just a discussion board, and feelings get hot and heavy at times, and we tend to write our thoughts quickly.

One thing you just wrote is notable: "don't have anything to lose if we crash are wrong". It seems there's a potential solution therein, and it follows from the logic of centralization and integration.

It seems one solution is a decentralized economic system.

I agree that the rags to riches story is like the beauty and the beast, it doesn't ususally work that way in real life.
I worked my ass of and am no better either. I have a student loan in default, and I can't finish my education, not like it would make a difference in employment anyway... I am a single mom and can't do the typical 50 hour week job with pension, etc...because my kids need me available for them (one has a disability) and I am still a little broken from 5 years in an abusive marriage.
There is no break for me and forgiveness of my debt because I was a prisoner in my own home for years... no "domestic violence" protection... so I am just struggling along, trying to keep food on the table and some peace in my home an heart. I have section 8, and that could very well dry up too, and then I would have no home, the idea of actually OWNING something is just a fantasy at this point.

and yes, I see where some who have strived for better would think I am being selfish because I say "I have nothing invested in this, let it fall..."

no easy solution I suppose, but is the worst that could happen starvation, riots, etc?
This is more than the economy, it is also peak oil and over population and food and water suppy issues... we can't run the rowld the way we have ben used to... and the breakdown and rebuild phases of anything are the hardest. I guess since I ahve had the same happen for me personally a couple times in my life, I feel better about starting from scratch than many...

run by scammers and liars at the highest levels of government and private hierarchy (one and the same?), my answer to your question is that the whole thing is being blown out of all reasonable proportion, likely because aggressive lobbyists want you to be afraid, perhaps because they're greedy and they think that fear among the populace works best as a strategy for them to get more money. At least I hope that answers your question.

I really liked your thoughts about peace in your home and heart, and am so sorry that you have had as much trouble as you have had. You're not alone, it is this part of the system that gives so many humans, the vast majority, so much heartache, and needs to wither on the vine and drop to the ground to make room for the next cycle's healthier growth.

Our system has attempted with all it can muster to take our happiness from us, so the controllers and authoritarians can be happier! That is why they use punishment as a training technique. It tends to shut down the hearts of those punished.

It seems to me you've risen above that.

If you do, you should care. Because you'll probably lose it. Do you have a piece of land where you can grow your own food? No? Then you should care. Because you won't be able to buy groceries.

Bake

and the other person I work for may lose her house and have to move...so my job situation is already iffy. I live in a rental, and we have snow or fezing temps 6+ months out of the year, so the garden is iffy too...

if the market crashes and chaos ensues... will the realtor have the where withall to remove me and other renters from their homes? will we just get to squat because everyone will be too busy covering their own asses?

This is the stuff I don't know, this is what I am asking...because if I had to just stay home and hunker down and live like a frontier woman, I may even stand a small chance... but this struggle and the possibilities of me having to cough up more of anything for this bailout would burden me more than I can fathom too..

looks like a lose-lose situation

and how do we even know this plan will work? It could just stall the problem for a short time....we could be screwn anyway

Their stuff put out on the street, a lock put on the door...a special lock. The person has 2 options..send someone for a rig to put their belongings in or walk away, because if you're in a city, it will all be stolen as soon as thieves see it's there.
You had better damm well hope the fix works because the alternative is not acceptable for polite society. They have put safeguards in place, oversight, less money at a time for Paulson to play with, lower ceo pay, equity in it for the government (taxpayer) and after they come back from the recess for the new congress, rules and regulations will be put on wall street and banks that help ensure that a situation like this will be less likely to recurr.

So don't worry too much about that.

Bake

squatters and evictions. Its really interesting. Not saying that we are in any way, shape or form going to be experiencing the same sort of things, but I, like you, have always wondered about stuff like that... how evictions can go down when it seems no one can afford to rent a place either way.

in bonuses for totally screwing up the companies they worked for.

And bush, cheney, paulson, bernacke.

The whole idea of capital markets is that you borrow money at a certain rate of interest because you believe you can make more profit with that money than it will cost you to pay it back to the lender.

As a simple example, suppose you own a gas station: rather than spending your cash to buy the gas that goes in the big underground tank, you get it on credit (usually 30 days) and in the meantime you expect to sell it at a profit to people gassing up their cars, who give you the real money to pay off the cost of the gas. Let's assume you make $10,000 a month after you've paid off all your bills, taxes, wages etc. So your business makes $120,000 profit a year, yay.

So, you realize that you could make twice as much money if you also expanded the store at the gas station, but it's going to cost you $450,000 to build a new one and $50,000 to stock it. Do you:

a) wait 4 years, then invest your entire profit for the last 4 years into building and stocking a store or
b) take your accounts to the bank, borrow the money, and pay it off over 10 years?

If you choose B, you're taking on debt but you're also creating jobs (short term in construction, long-term in store employees) and making an extra few thousand bucks every month - win! After you have the loan paid off, you'll be making a LOT of extra money. On the other hand, if you wait until you have all the cash you'll be taking on all the risk (instead of sharing it with the bank), and you'll be sacrificing 4 years of profits, during which time one of your competitors might decide to build a store and get that business for themselves.

If you want to see what a financial crash looks like, read up on Argentina from a few years ago. The value of your cash goes down, people start selling jewelry and furniture, there are problems finding certain kinds of food in the store, crime goes way up, and a lot of middle class people get wiped out financially while a lot of poor people are no worse off financially but but face even bigger risks of avoidable sickness and death.

Crashes often increase social inequality drastically, more so than even bailouts. This isn't a shock doctrine thing, it's basic economics and you can find lots of examples from history long before modern capitalism came on the scene.

Hedge funds do not have to register with the SEC like other stocks. I hope there will be provisions in the bill requiring them to be registered and regulated by the SEC.

Will the bail out bill outlaw credit default swaps?

If the bail out bill doesn't stop these practices from continuing, ones that have put us into this hole, then why bother? Why bother bailing out the assholes if they will only keep engaging in risky and damaging practices? Don't give these assholes shit if they continue their shenanigans.

Derivatives, not the mortgage crisis per-se, are the real culprits here.

Mortgage-backed securities are not derivatives, and neither are credit default swaps.

They are a bet on a debt defaulting.

MBS, no, they're just an utterly insane way of turning collateralized loans into securities, so that after a few layers of fiddling, what you've got is something whose value is roughly the same as the paper it is written on. The legal term for that is, I believe, "Ponzi scheme".

The problem with CDSs is that they're highly illiquid; although they do resemble a put option in many ways, they're not properly fungible. They're not properly classified by the IRS either, meaning that income on them may not have been taxed properly in recent years.

I know they look like derivatives and a lot of people refer to them that way; I'm just being super-pernickety here over terminology. FWIW, I'm friends with the derivatives SVP of a Wall Street frim, and I'm only mentioning this because he spanks me verbally whenever I misuse the term. This guy writes derivatives handbooks, so I'm willing to take his word for it. Incidentally his firm invests in renewable energy derivatives and he's strongly pro-Obama, so not everyone on Wall street is evil. He regards Paulson as an idiot; I'll ask him if he's OK with me copy-pasting some of his analysis here should it be relevant.

...if you are posting this from a computer you own, over an internet connection you're paying for? If the answer is yes, then I'd suggest you aren't really that poor, at least not in a global sense.

Total collapse of the market probably leads to very high levels of inflation. The price of pretty much everything goes up and the worse it gets, the more things spin out of control.

The simple version goes something like this. If there is no credit to be had because banks and lenders have collapsed, people spend less mooney. When people spend less money, companies provide less things and services...if no one can afford to buy it, they can't sell it. This can start a pretty nasty chain reaction. You can see the tip of the iceberg already in the large decrease in large item buying. We're talking about houses, cars and other luxary items. Lot of people (myself included) might say who cares if some fat cat doesn't get to buy a new Lexus this year, but that's just where it start. Pretty soon not only are the fat cats unable to buy their luxary-mobiles, but the middle-class can't afford to buy a Prius or Chrysler Sebring or some other middle of the road car.

Less spending means businesses make less money which means they make less things which means they need less workers. More job cuts. Less money gets spent. Less things get made. Less workers are needed...

and so on.

That's an over-simplification, but the bottom line is pretty much that a market economy - for better or worse - needs people spending money.

Maybe the people who are saying let it collapse are right, but I don't think so, because a full on collapse is going to be real bad for just about everyone for a long time.

Let the Repubs stew in their own juices. In late 1932, when the country was sinking deep into the depression, with almost all banks in the country going under, Franklin Roosevelt was urged by Herbert Hoover and many other national leaders to meet with Hoover and issue some sort of statement urging calm and promoting the idea that there would be a smooth transition if he should win the election. He refused adamantly to do anything until he was in office. He knew the republicans would claim credit for any improvement in the economy while they were still in office. I think we should follow FDR's example and refuse to bail out the repubs and republican bankers who got us into this mess in the first place.

because I am thinking a bailout NOW would ony stll the real crash till Obama is in office...then he'd be up to his eyeballs in an even BIGGER quagmire...

it's almost 4 months until a new president takes office. If the credit markets remain seized and a bunch more banks collapse, it could indeed get a lot worse.

Say you had a heart attack and the local doctor (ie Bush) is well known not to be a good doctor. Do you want him to try treating you, or wait a few hours until they find a better doctor? This isn't an endorsement of Bush in any way, just an acknowledgment that there may well be severe consequences to waiting.

I DO NOT LIKE this bailout at all, but I don't think we can just put it on the back burner until January. I'm not talking about a recession, but about a total collapse of the economy, which would mean food riots and the like.

Want to get money from an ATM at the grocery store? You won't be able to if the credit market freezes up. Bank A basically "loans" Bank B or the ATM-company the money to spit out at you. It's a short-term loan. Short-term loans are VERY important in a lot of ways...

Want to get paid for that job you work? Lots of companies rely on short-term loans to pay for things like payroll, utilities, inventory. You want a paycheck, the company you work for needs access to credit. You want them to be able to keep doing business for a profit? They need rates on short-term loans not to skyrocket (like they already are starting to).

The value of the dollar goes down... what does that mean? Inflation. High inflation. Gas goes up, food prices go up, EVERYTHING goes up... so you money is worth a lot less. That loaf of bread will cost you double what it does now. You'll be able to afford even less than you can now. The company you work for spends more money on basics (like electricity) which means less to pay employees. They'll let people go. Consumers spend less money, so if you're in ANY industry effected by consumers cutting back you might find yourself without a job very soon. The companies you do business with, like the one that provides you electricity so you can even be here posting, get hit with higher overhead costs, so they pass the increases on to you, making it even less affordable with you devalued money.

Don't be fooled into thinking that just because you don't have money in the bank or good credit you aren't effected. This could effect EVERYONE quickly and painfully. A lot of people don't understand how credit runs the world. Without it, things will come to screeching halt.

I think this bill needs to pass... I just think it needs to have the proper protections in place for tax-payers and the little guys. It cannot be a blank check.

I don't understand the economy or the markets so I've needed to really research this to understand how it does indeed effect all of us... It is downright scary.

as irrational and just as bone-ignorant as the kind of posters at freepers that we liberals love to ridicule.

I just feel so deeply ashamed of the majority (but by no means all) DUers right now. I'm afraid my "liberal elitist" attitude that Democrats, progressives and liberals are smarter than Republicans has been wrecked forever and it was wrecked right here on DU.

There are rational arguments against a bipartisan bailout. But I sure the hell haven't read any of them here on DU. What I'm reading is that a lot of people hate investors more than they love their children

I'm no economist myself, not by any means. But anyone with even a cursory interest in economics or a slight curiosity in economics knows and has likely known for some time that catastrophe was and is looming and has been looming since the real estate bubble collapsed.

Several farms around my home are owned by a large family that has a low interest credit line secured by their land. Every spring they tap that credit line to buy the seeds and fertilizers for their first planting. When they harvest that planting midsummer, they use the profits to pay off the credit line and to buy any additional materials needed for their second planting. When that planting is harvested, the profits are divvied up among the family members and serve as their only income for the entire year.

Now, what happens if the bank goes belly up and their credit line is frozen? They can't get seed, they can't plant, they can't SELL food, and they end up flat broke. If that happens enough, you end up with a MASSIVE food crisis.

Just one small example of one economic sector that would be impacted.

Right after the election we will be asked for another 500 billion. Then in another three months a couple billion more.

The economy will be in a tailspin either way.

The OP questioned how a credit crisis would impact "average" people. I simply provided an example.

FWIW, I don't have any faith that the bail out would PREVENT the scenario outlined above. That particular example isn't speculative, but is based on a real family that lives up the road from me (the land belongs to a family owned LLC owned by two brothers and three cousins, who inherited it from their grandfather). He, and many other credit dependent farmers, are already having issues with this.

That sucks, but it is a clear example, at least.

I wish there was another way around this mess... that's all. I don't mean to be insensitive to those who are living responsibly within their means. I am just disgusted by the enormity and the freaking out of the congress, etc about this...

I have had the same thoughts. "How the hell does this really effect me?" I have no 401K or investments, my job is secure in an industry that will still be needed in the worst of times. I felt like asking the question here, but have not since I know that I know squat about economics and am a "noob", I figured I'd get blasted.

I also always knew in the back of my head that the answer was that economic meltdown will effect every aspect of life.

Thanks to all the people who know way more than me about economics and Journalgrrl for asking the question.

I signed up for the political discussion and have gotten a lesson in economics.

It reminds me of the y2k people.

:rofl:

Yes, we're well and truly screwed, but we were before this too. Now we'll just have a little more company.

Please wake me when the revolution starts.
:kick: & R

they pass the bill, any "bailout" bill, and the money in granny's bank gets murdered by double digit inflation, US bond rating cuts to AAa or AA, and the real money, the rich American, Chinese and foreign investors, pick up a very nice profit when newly sold bonds demand 14-20% interest, and the ones holding at 3% make a killing selling them at 8-10%, gravy all the way up. The bonds regulate mortgages, so mortgages for the next 20 years will be at 18-20%, commercial credit (what they are trying to save) will be non-existant ANYWAY, so that is a wash.

Unemployment will abound, and your kids have no future.

There is a fixed supply of bonds. Supply and demand.

They DON'T pass it, and our already insolvent banking systems freeze, and all the things everybody has said.

Unemployment will abound, and your kids *might* have future.

This is the last best hope we have for paying some of our bills off, and we will have a Depression either way.

The real question is, do we let the Boomers and Great Granny pay for the mistakes of their tenure in American government, R or D, or do we go through 5- 10 years of everyone being poor to have a shot at a future. The question that will never be answered is "Why are you screwing your grandchildren???"

Either way, the "real" economy goes underground, tax collection drops rapidly, SSI and Medicare become means tested, and your Grandkids hate you. And we are all screwed.

Sorry, but you asked.

Not just the banks, but the country is broke, thanks to incredible mismanagement of the capitalists and the politicians who are supposed to control their greed.

The "bailout" is akin to serving very expensive aspirin to treat cancer.

and we the people end up screwed either way...

Speaking of aspirin, personally I prefer herbal medicine any day...legal & non! :smoke:

... is paying off the Protection Racketeers. The idea that they'll stop asking after they get $700 billion is sheer insanity.

and if these @ssholes fail, so will our line of credit and so will we. It would be pretty bad.

Because this bailout diminishes consequences for reckless and corrupt behavior, there's not likely to be a fundamental change in the way we do business. Crime pays. That means reforms borne of pain will be aborted. Even if we are somehow saving this busted-ass system (a very big if), how long can it last and what happens next time? I don't want to lose my savings and I don't want anybody's granny to either, but if we let this shit continue for our present comfort, your children or grandchildren will take the hit instead. Let it burn now or let it burn later, someone you care about is gonna get burnt. I say we do it now and take the filthy bastards with us.

If the credit system freezes you will not be able to use that credit card

Worst case... your account and my account will be frozen

Also if you pay attention this will also help people who have some debt

But at the most basic level... you won't be able to cash a check, use your ATM or even use a credit card here or there

This is at the most basic

Oh and even if this works things will still be tough for all of us for some years to come

...I usually take my paycheck to the bank of issue to get it cashed, and live off the cash in hand. very simple


but if the cash is worthless, then I guess I AM screwn...

if the credit freezes banks will not have cash on hand

You and I are not isolated

Because if I can I have no problem with your scenario.

Don

which is what it means if the let it fall crowd has its way

Right now I have no investments in the market I cashed out my 401k a couple years ago to cover cost of living. But now I'm doing well financially no credit debt, just a mortgage and 2 car loans one car loan almost paid off.

but I think the credit crunch is actually a good thing. Companies, people and our country need to stop living on credit. If the bail out works as planned things will continue as they have been and eventually the same thing will happen because we can not keep living on credit like this.

The cost of living has got to reflect what real wages are. Right now so many are living on credit to compensated for slack wages that it's created a bubble. The financial institutions have created this bubble by doving out immense credit to anyone at extreme costs. This bubble has got to pop and IMHO the collapse of these financial institutions is the only way things will get rectified.

thatat's what I mean...credit is NOT a way to LIVE... My dad taught me that. Now, If I actually had any "worth" I guess I might beg to differ. But I agree that what is truly the issue is that people lose jobs or get cuts in hours, and they are living off of their credit cards... if this is the problem, then it does need to stop.

I repeat, credit is the devil. It is wrong in so many ways...usury, isn't that the "biblical term"...?

maybe it is time to invest in some wampum beads,( and cigarettes and whisky and bulets for barter?)

I understand those who have 401K and investments and play by the rules and get slammed as this shit hits the fan... my parents are probably in more danger than my dad will admit...(he has his retirement tied up in Lucent and AT&T stock, that culd get wiped pout in a heartbeat too... at least he owns his home outright, and I guess we'd be living with them if shit goes down cuz our rental may not be an option...)
but geez, does this have to be foisted upon us like this?

I just think it is blackmail, especially for people like me who have nothing to do with it!!! let the rich bastards who have all the tax breaks do the ponying up!!!

There are so many options to dealing with this that are not even being considered because they insist on preserving the detrimental/profitable components of the system.

The scheme is built to fail so the only way to win is not to play.

you have some sort of shelter? a job? food? beans are good. all those things can go away. I have a daughter and do NOT want her to ever have to worry about where she is going to lay her head down or if she'll be able to eat.

From the guys who brought you "terror terror terror!"(TM)...the same guys who just happen to stand to benefit greatly from this bailout.

If you want an actual analysis, try this interview with Notre Dame finance professor Richard Sheehan by Glen Greenwald:

http://www.salon.com/opinion/greenwald/radio/2008/09/23/sheehan/

Because many people are in bed with these crooks and have 401k's, investments in wall street. You don't. They want the bailout so they don't loose the money. What they forget is that they are already in the hole probably for more than 5k for bailouts this year. They probably have lost half their 401k. They think that they are making money.

and I started this thread out of frustration and anger and a little fear too...I DID go and empty my bank accounts today, filled the gas tank and hit the grocery outlet, stocked up on my extra goods, as well as just regular stuff.

I may remain poor, but at least I am not getting reamed!

I am not trying to upset others who are involved in this mess, even in a small way...but it is just apparent to me that part of the change we will be creating here is that CHANGE requires some tearing down before it can be rebuilt. We may be seeing that manifest now. hold on for a bumpy ride...

just don't trust it either way i suppose...I have been at the bottom of the food chain fo so long that I am used to scrapping for a life.

I'm a "her" ;)

thanks for taking up for me... but poverty, while it sucks...has taught me about survival for sure!

Glad to be of service.

What did Jesus say?

If the system collapses, I and many others will not be accepting worthless Federal Reserve paper for goods and services.

The poor will not have an umbrella.........

So, I care, not just because I am pretty well off, but because financial ruin often results in devastating war, horrific poverty and the potential no shit fascist takeover of our nation. The Right has already picked a scapegoat - Hispanics, and if we don't avert a meltdown, they will suffer. People of European descent have a long history of genocide.....

Just because many of us are passionate and openly emotional about this issue doesn't mean we are stupid. Let me be clear: I am 100% opposed to ANY form of bailout. Do I have any idea as to what no bailout might mean? Yes. I have a very good idea, at least as good as other well informed people, regarding events that haven't happened yet. I honestly believe that whichever road is chosen, at the end of either, a Depression awaits. There will be wholesale hardships, unseen since my father's generation. There will be severe shortages of many staples. Our modern society is less prepared to cope with an upcoming depression than my father's generation was. Yes, we are in for some brutal times. But, knowing, or suspecting all of that, I would rather have an opportunity for a more honest and balanced, fairer economy, with regulation and accountability. If the only real chance of that would be for the economy to tank and the system collapse, then I would be willing to go through anything to get to that point. My family and I are survivors. We've been through hell and back more than once and kept coming back up swinging. If anything, we are resourceful. I, too, don't crave an economic disaster. No sane and sensible human can shrug off other people's suffering. I just strongly believe that if any meaningful change is to come out of this crisis, if, indeed it DOES take us having to suffer through a Depression, in order to get my country back, then it will be worth it to me. I respect opposing viewpoints. This is a rough issue, and as I said at the beginning, although I am not stupid, I'm no expert on matters of the economy.

:applause:

Although I admit to being a lot more naieve about the economy... partially because I have never "owned" anything of big value my whole life, never had a job that lasted more than 2 years at best, never had healthcare, and been on & off welfare a couple times...so I am not in a really good position to do very well in either scenario. I am a litle 'prepared' but sill hoping I don't need to be. I would like our infrastructure and lifestyle to continue s it is, but thanks to peak oil and other factors... it cant, that's the fact.

sooo, instead of seeing the upcoming change as awful, full of violence and fear and god knows what - I'm trying to see a way we can do this gently, without causing the rug to be pulled out from under us.
Then I see the way humans act, and the anger and fear we revert to...it could get really ugly.

I hate this idea (the bailout), and I think it is only a short stay of execution to our economy and capitalism as we know it...
just a matter of how far we fall how fast, but I too think it IS coming.

My dad & mom survived the first Depression, but their lives were still closer to the earth than any of us now. There was extended family and people who still had skills like sewing, basic carpentry, farming, etc... this generation is SOOOOO removed from that.
I live in a rural area and still can't believe how easy I have it even! City folk will suffer the most, I wouldn't want to be around that many people in one place freaking out.
But I also live in a brutal winter environment, and that can weed poeple out too, if there is no heat or food...

scary times, man. I guess we can try to build our "tribes" now and maybe set up contingency plans for when the shit hits the fan. not IF, but WHEN...

"Will my grocery store close its doors and stop selling food by next week? will the gas stations close? How insolvent is EVERYTHING if this is the true consequences? I just don't get it."

No, not next week (unless you live in a place affected by the current gas shortages and the shortages get so bad that not even enough gas to make deliveries to a supermarket near you).

But some day, yes, don't know exactly when and don't really want to know. The whole technocivilization is insolvent and this century is the pay back time, says Mother Nature, and who can blame her?

Credit markets are not going to disappear. Are you kidding? Capital follows the returns, and that means whoever pays the highest interest rates will get funds.

Our economy is full of air, and it is time to let the air out, NOW, before the election. Why should we wait to see this happen after the election?

...Bush has given himself too much power in the event of a collapse or any kind of real unrest.

So if this plan is just a bandaid till Obama can take the reigns and re-work it...so much the better... but if it just gives more powert o those who are already drunk with it, what's to stop them from tking over and calling off the elections anyway?

In the end - what it really means is the that gov is borrowing more money just like you would borrow on one credit card to pay another. Eventually this collapses and you get either an increase in taxes and/or reduced gov programs. This usually is where the poor get screwed the most of course.

So yeah. It will affect you.

Doesn't stop there either. Eventually the sell off (privatization) happens, which means PAY up or shut up for just about any "services". So the rich get nice private police, fire, etc protection, and you get jack. Sucks.

People dont realize how many people died in the depression. Starvation. Frozen. Disease.


Happened in S America, Africa, Poland, Russia.... Disaster Capitalism.


That does NOT MEAN I am for the bail out. Im 100% sure it is part of the "shock" and there are better ways to get out of this mess than handing over $700,000,000,000.

So do their investors, which include millions of individuals and a lot of peoples' pension funds.

(I am a former S&L employee who was affected very heavily by the S&L crisis.)

I didn't "get mine" so fuck everyone else. I don't think that is much better than the former...

I read this same sentiment in various posts the last few days and it's kinda sad, me thinks. Don't get me wrong though, I'm not so sure about this whole bail thing myself. I don't know if it's all bullshit or not. However, some come off that even if it was clear that it would solve the problems that they wouldn't want it to go through because they feel they wouldn't be affected by it more than they already are... despite the face that there are millions of people who would be greatly affected by it who may be better off, but are by no means the super rich who are to blame for this....