This $700, excuse me, $850 BILLION with all the 'sweeteners" added, is nowhere near enough to handle the mess here. The Credit Default Swaps are indeed tentacled beasts, but just Fannie and Freddie alone, which we the taxpayers are now the proud owners of, are so screwed up, they alone will take TRILLIONS to clean up.

Rather than leaving the people on the hook who started this, the govenment is trying to cover its tracks and let the bastards continue on to do do businss another day.

No one will learn.

No one will pay any consequences.

Again, on the bright side, we can be proud and feel great that the "playing field" was levelled and that more minorities and low income people than ever own homes. In fact, Chris Dodd and Barnie Frank, along with the Obama/Biden administration, are going to do whatever they can to keep these inncoent bystanders in their homes by forcing banks to write down the principle and giving them preferred interest rates. So you see, despite the inconvenience, the world is a better place and equality is on the march.

quote:

Originally posted by cdr:
I personally do not have a burning desire to save a bank or other financial institution or any business that is unsuccessful. Our entire political system is geared toward throwing money at the lowest common denominator, with predictably bad results. If those of you who supported this "bailout" feel morally superior or that you supported doing "something" as opposed to nothing, just wait for the fallout over the next several months. "Bailout 2" and "Bailout 3" will be "necessary" because "doing nothing will not be an option."

I think this should have been allowed to play out, albeit very painfully, with the market determining the direction, which is probably down, until the poorly run businesses and dishonest people receive the fruits of their failure and poor decisions. I am now hearing the spin that, "Hey some of this paper is good and we will make money on the deal." If this is true, why are these businesses dumping it?

Congress caused this problem. Fannie and Freddie are primary causes. Their dangerous but well intentioned desire to meddle in the market and produce an equality of outcomes for people - the belief that government should decide who can purchase a home - has been disastrous, as all of these initiatives always are.

It's gotta stop. It should have stopped now. More than just the credit nmarkets are frozen here.

cdr, in all due respect this post is riddled with inconsistencies. You rightly claim “more than just the credit markets are frozen here”. And yet you rail against doing anything. My I respectfully ask again, what do you propose should be done? And please don’t tell my nothing, I assume that you are smart enough to not endorse the Hoover doctrine. You do claim that it should be allowed to play out until “until the poorly run businesses and dishonest people receive the fruits of their failure and poor decisions”. May I ask what about the well-run businesses and honest people who are about to lose everything? Would you get a perverse sense of satisfaction to see the return of breadlines?

As you know I too feel that the government is to a large degree to blame for this mess, that does not mean they shouldn’t at least try to help mitigate it. It is at best wishful thinking and more likely a willful ignorance to think that if we just let the markets work everything will turn out okay. We are standing on the precipice of the worst economic downturn since the great depression, and IMO it could easily turn out to be far worse, and you have faith in the free market system to turn it around. That is a dangerous and jejune tack to take. Paulson's plan may not work, it may be a huge mistake, but at least it is not idly standing by while the entire world's economy collapses. You seem worried about the consequences of action, yet totally disregard the know results of inaction. Now is not the time to assign blame or punish the guilty, there will be plenty of time for that later. Now is the time for all thoughtful men to do all they can to stop this train wreck which is about to occur.

I'm thinking of the Yiddish saying, "May you not live in interesting times."

European banks are having to be rescued, and Asian markets are spooked. I really hope times don't get much more interesting.

A friend who relies on the smooth operation of credit markets likened the situation to climbers who rely on protective placements of gear to stop falls. Every piece of protection that fails puts added stress one the next piece. It's a lot like the molecular level of breakage. A lot like a zipper.

Hold onto your shorts today, expect a wild ride.

At the end of the day, what percentage of those shorts will be full, and what percentage will be empty? Time will tell.

Moo

quote:

Originally posted by Sacred Cow:
Hold onto your shorts today, expect a wild ride.

At the end of the day, what percentage of those shorts will be full, and what percentage will be empty? Time will tell.

Moo

i just lost mine.

Market below 10,000.

Oh well, I really didn't want to retire...

So much for thoughts on remodeling the house. Talk about battening down the hatches. This may be a Category 4+ storm. The question is do you buy stock on this downturn.

Down down 575, which is not as much percentage wise as NASDAQ and S&P.

Anybody have any experience catching falling knives?

I see the Dow going down at least another 15% from here by years end, and possibly more. 15% will not even get it to 2002 levels, this is a crisis of far greater consequence than 9/11 or the tech bubble.

quote:

Originally posted by DoubleD:
The question is do you buy stock on this downturn.

there s hould be no question, you don't.

this is purely a technical market. All charts point downwards, you might have a little pop if you're day trading you might want to catch. But if you're in it for the long haul, you either hold or you sell.

quote:

Originally posted by Sacred Cow:
Hold onto your shorts today, expect a wild ride.

At the end of the day, what percentage of those shorts will be full, and what percentage will be empty? Time will tell.

Moo

I'm into 100% cash or cash equivalents, so my shorts are fine

quote:

Originally posted by sprnplr:

quote:

Originally posted by Sacred Cow:
Hold onto your shorts today, expect a wild ride.

At the end of the day, what percentage of those shorts will be full, and what percentage will be empty? Time will tell.

Moo

or cash equivalents, so my shorts are fine

yea.. remind me what happened to those auction rate securities ... as good as cash..

I've it all before =P

I would like to see a smarter group of people assembled, to serve with no pay, to pull this mess apart and make recommendations. Paulson should recuse himself and the congress is to blame. I am sure there are plenty of very smart people in think tanks or the private sector who understand these issues and have some ideas how to make the landing as smooth as possible. It cannot be "solved." Congress is incapable of making things better. Te only thing congress will attempt ot do here is blame Halliburton or President Bush and clean the tracks running between their office doors and Fannie and Freddie.

Again, the free market, while imperfect, is desirable over government action. Lenders either never would have made many of these bad loans or would not be asking for a handout if government had not required or coerced them to do so in the name of "housing for all." I am outraged about Fannie and Freddie. The two way pipeline between these corrupt, ill conceived organizations and the congress created this disaster. I want perp walks! I want to see Franklin Raines in handcuffs. I want Chris Dodd and Barney Frank and Charlie Rangel in the chairs being questioned and insulted and humiliated, the way they treat their political opponents when they get to ask the questions and grandstand. I want to get to the bottom of this. While the "smart" people keep throwing our money on the burning fire, I want to see hearings begin IMMEDIATELY. I want justice for the American people.

VT2IT, do you think there are more than a handful of people in the congress that even have a clue what is going on here? Why do you put your trust in them?

This freaking sucks.

it really sucks for us youngin's coming into the work force right after 9/11 ...
my 401k was basically in accumulation mode for the past 7 years so my average cost is quite high. Rode the gains up, and basically only after you include the tax deferment am I back "even"

quote:

Originally posted by g-man:
it really sucks for us youngin's coming into the work force right after 9/11 ...
my 401k was basically in accumulation mode for the past 7 years so my average cost is quite high. Rode the gains up, and basically only after you include the tax deferment am I back "even"

Overall, I'm in the 'black' solely due to employer matching.

However, we have a lot of time to rebound from this. The old farts, however, are those getting hit hardest.

No cdr, I believe that there is less then a handful in congress who have even the slightest clue what is going on. When I read last week that a staffer of Dodd's had no idea what LIBOR was that confirmed it for me. I in no way trust them. I do how ever think that Paulson understands, and that it would be better if congress stays the hell out of the way and lets the money men in the Fed and Treasury Dept have a go. Look at all the good the so called fiscal hawks did by delaying passage for a week, we got $150B of unrelated pork. Way to stand up for your beliefs, and screw your constituents.

Your continued calls for finding out who to blame are going to do nothing to help solve the problem. Yes, it is clearly partially the fault of liberals in congress, so what, so is all the rest of our problems. Whining about does no good, I'd like to see solutions not hear rhetoric. It is far too late too study the problem, we waited too long and must act now. Does that mean our actions may fail, or even be counter-productive, unfortunatly yes. That however is the situation that we find ourselves in. Your response would be like holding hearings after Pearl Harbor to find out which Admirals to blame instead of going after the Imperial Navy. We can look for perp walks after we win the battle, now is time to fight it.

Unfortunately, this is no longer just a US problem, if it ever was. It is fully international in scope. I am awaiting some concerted international effort, which will provide the uptick I am looking for to bail to my desired cash percentages. Then I will be able to pay much less attention when the effort fails.

Personally, I don't think Paulson has a clue. Neither does anybody else. This is all going to be throwing crap at the walls to see what sticks, similar to the existing campaign strategies.

Moo

The bigger picture and much scarier one is that there are going to be many many job losses following this.

anybody hook me up with a headhunter in texas? =)

quote:

Originally posted by Sacred Cow:
Unfortunately, this is no longer just a US problem, if it ever was. It is fully international in scope. I am awaiting some concerted international effort, which will provide the uptick I am looking for to bail to my desired cash percentages. Then I will be able to pay much less attention when the effort fails.

Personally, I don't think Paulson has a clue. Neither does anybody else. This is all going to be throwing crap at the walls to see what sticks, similar to the existing campaign strategies.

Moo

There will be no concerted international effort, there is way too much disagreement and distrust. The entire premise of the EU is flawed. As for the effort failing, it very well may, and then we will really be in deep. The two most likely causes of failure are; it is too late now to stop the inevitable, and that banks will not participate due to the penal terms put in place by the congress.

How about one more tidbit of gloom. Europe's Stoxx 600 trades at 10.4 times earnings, while the S&P 500 is valued at 20.9 times earnings. We will have to see the S&P index drop 50% to equal the European values.

And as I have mentioned before, stocks used to trade below book value. There could still be a LONG way to fall, though I am not predicting it will fall that far. God, I hope I am right.

And short sellers are allowed back in the market on Thursday.

Down about 750 now, and still falling.

Moo