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How Much Can You Afford to Lose?

The Dow had its worst drop in two decades today -770 points. I don't have any investments, but my mother has a modest amount that is used to pay for her nursing home care. Last week her account was dropping thousands a day, except for the day it was announced an agreement had been reached. Today, she lost many more thousands.

That strikes me as pretty serious. I do believe the market comes back eventually, but how much more can people afford to lose?

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    Well, (5.00 / 1) (#1)
    by litigatormom on Mon Sep 29, 2008 at 11:03:06 PM EST
    the Dow is where it was nearly 8 years ago when Bush was inaugurated.  We would have done better hiding our money under the mattress.

    I remember in 2004 (4.20 / 5) (#9)
    by Militarytracy on Mon Sep 29, 2008 at 11:09:07 PM EST
    we were visiting some of our local friends and having dinner and drinks during the election.  They were huge Bush supporters and we tried to not talk politics because it always ended up in a fight.  They were so thrilled though because they had refinanced and pulled some of their newly minted equity out of their two year old house.  They boasted that this was due to Dubya Bush's economic policies of free markets.  I remember snidely telling everyone there to just wait and see what our houses were worth when he was done.  I didn't mean it like this though.  I was just guessing at where his recklessness was going to get us based on where it had taken thusfar, didn't know how accurate that was going to be though.

    Parent
    There's a parlor game (5.00 / 3) (#30)
    by hitchhiker on Mon Sep 29, 2008 at 11:23:52 PM EST
    i read about once, where you have to describe the ideal economic system . . . only you don't get to choose what place you hold in it.

    Would you rather live in a socialist country, knowing that you might be one of the frustrated standouts, or in an un-regulated capitalist country, gambling that you might be born into it as a crack baby or just a poor rural kid with no special skills.

    It's still tough for me not to be angry with Bush voters.  They didn't just screw themselves, they screwed me and mine.  

    Parent

    I like that (5.00 / 1) (#58)
    by gyrfalcon on Mon Sep 29, 2008 at 11:44:18 PM EST
    But maybe that's because I'm a socialist at heart.  In our system, as the saying goes, everybody is equal, except that some are more equal than others.  Feh.

    And yet I'm forced to participate in it or I won't be able to survive when I can no longer work.

    Parent

    I'd rather live... (5.00 / 1) (#66)
    by Dadler on Mon Sep 29, 2008 at 11:53:31 PM EST
    ...in a social democracy where one economic credo reigned: whoever you are, if you work your honest 40 a week, you'll have enough not simply to survive but to prosper.  In other words, in a nation that realizes without as many people as possible having as secure a life as possible, there is no real security for the nation itself.

    Parent
    Yeah, (5.00 / 2) (#96)
    by hitchhiker on Tue Sep 30, 2008 at 12:36:35 AM EST
    I'm kind of there too.  I hear about those Scandanavians and feel mostly envious.

    Last night I heard an economist saying that this mess began when productivity increases weren't matched by wage increases.  He said that the stupidest thing that's happened in the last 30 years is what's happened to the minimum wage -- that and the absurd gap between a worker's pay and a ceo's pay.

    How can an economy that depends on consumption be expected to thrive when goods are gradually getting ever more expensive to big subsets of the population?  

    He seemed confident that we're going to be forced to face this, and that once we do, things will start feeling sane again.

    Sh&t, I put myself through college on waitress jobs in the early 70's, and it wasn't that hard.  I don't see too many kids able to pull that off today.

    Parent

    I had no problem finding (5.00 / 1) (#104)
    by gyrfalcon on Tue Sep 30, 2008 at 01:15:26 AM EST
    an apartment I could afford on a low-level entry salary right out of college.  THat hasn't been true for a long time now.

    Parent
    real wages are lower (5.00 / 1) (#129)
    by bigbay on Tue Sep 30, 2008 at 02:30:09 AM EST
    than in 1972.

    You can find that buried somewhere on the BLS website.

    Economic expansion and growth has only occurred through an explosion of debt and deficit spending on all levels, and the off-shoring of production to cheaper labor markets.

    The reality is that the capitalist system has been broken for a very long time. It's a worldwide situation. Japan has been mired in 10 plus years of stagnation since their real estate sector exploded. Europe is highly leveraged as well.

    Parent

    When you look at Scandinavia (5.00 / 2) (#140)
    by BernieO on Tue Sep 30, 2008 at 06:03:31 AM EST
    you see what is basically a mixed system working well. That's the trick - to get the right balance. Same with regulation. We need it to ensure transparency and limit the amount of risk-taking in the system, but it is also true that too much regulation as well as the wrong kind can stifle an economy. Free markets work very well in many situations, but some (health care for example) require more government regulation. Also Free markets only work when consumers have the information they need to make an informed choice. Ever notice how supposed free marketeers always oppose efforts to increase labeling and truth in advertising?

    Our country has been drinking right-wing Koolaid ever since Reagan and his people figured out how to manipulate the media and public opinion. They sold the idea that government is bad and free markets have magical powers. We now worship capitalism over democracy and put the needs of Wall Street first.

    This meltdown gives progressives an opportunity to reframe our worldview and return us to sanity. Whether Democrats will do this is an open question. Nancy Pelosi spoke the truth yesterday when she blamed the mess on failed Republican policies. Granted it was not the best time, but just this morning I heard pundits ranting about how terrible it was. Apparently it is worse to speak the truth than to lie to the public for years about things like tax cuts paying for themselves, regulations being the root of all evil, etc.

    Parent

    Parallels are being drawn between our (none / 0) (#157)
    by ding7777 on Tue Sep 30, 2008 at 07:55:47 AM EST
    current banking crisis and the Finnish/Scandinavian banking crisis of the late 1980's.

    The cause? Deregulation without supervision.

    Finland: How bad policies turned bad luck into a recession

    Parent

    Upper Middle Class Just Got Spanked into Lower (none / 0) (#158)
    by supertroopers on Tue Sep 30, 2008 at 08:11:12 AM EST
    Middle Class.

    They should have never been upper - thankfully the market is correcting itself with help from our inept congress.

    Anytime a union worker is making 100K+ to screw in light bulbs and sweep floors you know something is wrong. CEO Pay? Try UAW Pay. Now that is rediculous.

    Parent

    I'd take libertarian anarchy.... (none / 0) (#160)
    by kdog on Tue Sep 30, 2008 at 08:18:01 AM EST
    I just wanna be free and come what may, as long as I'm making the decisions effecting my life.

    To quote John Lennon..."I don't believe in Beatles, I just believe in me."

    Parent

    T-Bills (none / 0) (#6)
    by andgarden on Mon Sep 29, 2008 at 11:05:42 PM EST
    And yeah, ugh.

    Parent
    Doing his part to (none / 0) (#147)
    by dead dancer on Tue Sep 30, 2008 at 06:50:55 AM EST
    remove any traces that he was even the president!

    Parent
    Since I read bonddad diaries (5.00 / 2) (#2)
    by Militarytracy on Mon Sep 29, 2008 at 11:03:30 PM EST
    I pulled all of our investments out of the stock market over a year ago because the market insanity and instability was impossible to ignore any longer.

    Smarter than me ... (none / 0) (#82)
    by FreakyBeaky on Tue Sep 30, 2008 at 12:08:17 AM EST
    ... by at least several months.

    Parent
    I'm not retiring for at least 20 years (5.00 / 1) (#3)
    by vj on Mon Sep 29, 2008 at 11:03:41 PM EST
    Probably more like 25, if I live that long.  Most of my investments are in my retirement accounts.

    I'm advised that if I have 20 years, I should just hang in there as the market is bound to come back.

    but I do feel like a sucker.  I just try to look.

    It seems like anyone who is near or in retirement, would want to be in only the safest investments - FDIC insured money market accounts, FDIC insured bonds and, I guess, T-Bills.

    Um... I just ry "not" to look (none / 0) (#4)
    by vj on Mon Sep 29, 2008 at 11:04:20 PM EST
    not to be alarmist (none / 0) (#130)
    by bigbay on Tue Sep 30, 2008 at 02:33:51 AM EST
    but there really is not any guarantee the market will bounce back. The history of the stock market is too short (100 years, max) to really provide adequate assurances. Japan's stock market hit 40,000 around 1990. It's now at 15,000 , or so.

    Parent
    I don't know (5.00 / 1) (#7)
    by hitchhiker on Mon Sep 29, 2008 at 11:08:58 PM EST
    how much people can afford to lose.  For us, it came down to how much we needed to finish paying our kids through college. One's a junior, one just started.

    My husband's company folded a month ago, and this is not a great time to be looking for work . . . he's disabled, he's over 50, but he's great at what he does.  So far, nothing.

    So we set it up a couple of weeks ago to be good to pay tuition for the rest of the school year, as long as I keep working.  I've got to believe he'll be employed again before next fall; if not it will probably mean that college tuition is the least of all our worries.

    The thing that frustrates me is how hard it is to know what the hell they're not telling us.  Don't they really know, or do they just not want to say?  How frightened do they have to be to make all this trauma?  What are we supposed to make of them taking a few days off for the Jewish holidays?  Is it really not that big a deal?

    No idea.

    not looking is what I'm doing. (5.00 / 1) (#10)
    by thereyougo on Mon Sep 29, 2008 at 11:09:55 PM EST
    I'm sorry about your mother's investments, Jeralyn.

    Sheesh makes you wonder what good is government for any more?

    I am glad that package didn't pass because Main St didn't get much of the bailout,for the distressed homeowner. My sister is in that group. She wants to renegotiate her high interest loan, but the bank told her she couldn't because her property value had dropped more than 30%. Thats why people walk away from their mortages.

    I'm not saying I supported the bailout bill (none / 0) (#35)
    by Jeralyn on Mon Sep 29, 2008 at 11:26:15 PM EST
    I honestly don't have the economic background to understand it all. I'm just writing about the effects of the situation, and wondering if we are in crisis mode or if it's reversible. I don't have the answers to either question, and I don't think I'm the only one confused.

    I sure hope the nursing home doesn't go under. It's a Manor Care facility which is the largest chain in the U.S. I wrote about the Carlyle Group buying it earlier this year, and the problems with private capital groups taking over nursing homes.  Then a group of Dubai investors bought a big interest in Carlyle holdings. One example:   its aviation division.

    So, will Dubai and middle east investors be needed to save our banks if our government doesn't step in? At dinner tonight with some financially savvy friends, I asked that question. The answer I got was they won't want it now, they'll wait till the prices reach bargain basement.

    Hardly reassuring.

     

    Parent

    Oh, good (none / 0) (#39)
    by Ga6thDem on Mon Sep 29, 2008 at 11:28:07 PM EST
    point about the Dubai banks. I read a couple of years ago where those banks were becoming powerful in Europe.

    Parent
    Once upon a time, (5.00 / 2) (#57)
    by NYShooter on Mon Sep 29, 2008 at 11:44:04 PM EST
    .. but no more. Foreigners flocked to buy U.S. Financial stakes a year ago; today they're sitting on 75% losses.
    Might be awhile before they come-a-bargain-hunting here again.

    Parent
    Hey (none / 0) (#72)
    by Ga6thDem on Mon Sep 29, 2008 at 11:56:20 PM EST
    thanks for the updated info. Obviously I haven't kept up with that in quite a while.

    Parent
    Those in Retirement and About to Go Into ... (5.00 / 2) (#23)
    by santarita on Mon Sep 29, 2008 at 11:21:31 PM EST
    retirement are the ones who will have a hard time recovering lost ground.  For people who do not need the money right now, the losses will be recovered eventually.  

    This is a BIG Wake Up Call for Everyone (none / 0) (#138)
    by ig on Tue Sep 30, 2008 at 05:33:30 AM EST
    Does the 700 billion eliminate the root cause of this economic crisis? Or is this just lipstick on a pig, and we are destined to have a repeat of this debacle again?

    Parent
    Please look at the big picture (5.00 / 2) (#44)
    by rationalMind on Mon Sep 29, 2008 at 11:30:28 PM EST
    This is my first post to this site. I have been a reader here for more than 4 years. So, sorry for taking such a strong stance in what follows. But please understand I feel passionately about this.

    I think as progressives its important to look at the big picture. And the big picture is that its sad that in the richest country in the world, your mother has to fend for her own health care and pension after retirement. I think thats what needs to be fixed.

    This bill doesnt fix the economy or even the markets in the long run. The economy is broken because of 30 years of Reaganomics or free market facism. And this bill is just extortion by Wall Street. Pay us or we got your pensions.

    I think as progressives it behooves us to reject this bill. That doesnt mean we do nothing. Lets move bills which really fixes main street, regulates the gamblers/extortionists in wall street, provides health care for all, strengthen the unions and their bargaining powers.

    Those are the things which, IMO, progressives should be pushing for.

    Thank you for the insight (5.00 / 1) (#59)
    by befuddledvoter on Mon Sep 29, 2008 at 11:45:16 PM EST
    I could not agree with you more.  Over the last two weeks all I have thought about really was this means no universal health care; no enhancements of programs for the seniors; no forgiveness for educational loans. Those are my concerns since I own very little and seek very little.  

    What makes it so difficult to share your perspective is that so many Americans have lost a bundle in a few weeks in the stock market; the value of their homes; the ability to obtain credit.  Those are immediate and concrete problems for which people want an immediate resolution.    

    Parent

    Well, If We Keep On the Same Pace that We Are ... (5.00 / 1) (#63)
    by santarita on Mon Sep 29, 2008 at 11:50:56 PM EST
    on now, major reform should be a lot easier - after all the Federal Government now owns Fannie Mae and Freddie Mac, has warrants for equity in one of the largest insurance companies in the world, and the large independent investment companies no longer exist, and several large banks (WaMu) and Wachovia have been forced into a shotgun marriage.  

    Parent
    AFTER (none / 0) (#65)
    by gyrfalcon on Mon Sep 29, 2008 at 11:51:45 PM EST
    we stop the bleeding.  There will be no opportunity to do any of those good things if the financial system collapses, which is is on the verge of doing.

    You simply have to understand the distinction between short-term emergency measures and longer-term broad-based economic measures. If you don't get that, you don't get what's going on right now.

    Parent

    Look, if this is such an emergency (5.00 / 2) (#69)
    by Militarytracy on Mon Sep 29, 2008 at 11:54:30 PM EST
    why did everyone leave?

    Parent
    The got religion. (none / 0) (#100)
    by oculus on Tue Sep 30, 2008 at 12:56:51 AM EST
    Because of people like you (none / 0) (#113)
    by gyrfalcon on Tue Sep 30, 2008 at 01:30:28 AM EST
    telling them you wouldn't stand for them voting for anything like this bill, would be my guess.  Politicians are cowards.

    Parent
    Yes, they have been so afraid of me before (none / 0) (#153)
    by Militarytracy on Tue Sep 30, 2008 at 07:27:05 AM EST
    as they continue to fund sending my husband to fight wars that most of the world considers illegal. They certainly were so afraid of me that they decided to set the whole world on fire by not passing a really bad crappy bill yesterday.

    Parent
    I disagree (5.00 / 2) (#84)
    by rationalMind on Tue Sep 30, 2008 at 12:10:23 AM EST
    Even in the short term a much more people friendly bailout could have been proposed. Why not follow the Swedish model from the 90s - in return for recapitalization of banks, the banks get nationalized, that is, equity holders in them get whiped out. Why are the very people who caused this mess been rewarded?

    Here is an analysis from Joe Stiglitz (Nobel Prize in Economics in 2001).

    http://www.countercurrents.org/stiglitz270908.htm


    Parent

    I would welcome that (5.00 / 1) (#112)
    by Manuel on Tue Sep 30, 2008 at 01:29:49 AM EST
    but we aren't in Sweden.  That plan would get zero Republican votes and likely not a majority of the Democratic caucus.  Meanwhile the house is burning.

    Parent
    Really! (none / 0) (#114)
    by gyrfalcon on Tue Sep 30, 2008 at 01:31:52 AM EST
    Can we stay in the real world just for a little while, please?


    Parent
    Not very helpful (5.00 / 1) (#131)
    by rationalMind on Tue Sep 30, 2008 at 02:47:28 AM EST
    I dont think this mindset is very helpful to the progressive cause. The proposal is not outlandish since it was successfully implemented in a western country in the recent past.

    Look there are two options:

    1. We submit to the blackmail. Maintain status quo and continue with the policies which we have been following which got us into this mess.

    2. We have probably once in a lifetime opportunity where the elites are weak and we have the upper hand. If they are really desperate, then they get the money on people's terms. If they are still bargaining then they cant be that desperate. So, why bother with the bailout.

    If we are going to capitulate to them every time, then why bother with the two party system. Just make it a one party system and let the republicans rule.

    Parent
    What you refuse to acknowledge (none / 0) (#154)
    by Militarytracy on Tue Sep 30, 2008 at 07:31:21 AM EST
    is that weeks ago YOUR real world changed drastically.  You can either fight the real fight or continue to fight these faux sinking in quicksand fights. It is you refusing to deal with reality, not the poster you are replying to.  I can't believe what a bunch of cowards many people claiming to be progressives are.  If I was this cowardly I would have literally melted days into one deployment.

    Parent
    Well said Tracy.... (5.00 / 1) (#163)
    by kdog on Tue Sep 30, 2008 at 08:31:04 AM EST
    that's the key word...cowardice.  Are we free men and women or are we mice?

    Like when the mafia tries to extort you in a protection racket, they are counting on you not having the courage to say no, just like your garden variety bully.

    Parent

    Refusing to face facts is what's cowardly (none / 0) (#159)
    by gyrfalcon on Tue Sep 30, 2008 at 08:14:30 AM EST
    The problem is that (none / 0) (#143)
    by BernieO on Tue Sep 30, 2008 at 06:25:39 AM EST
    we don't have a lot of time. Once the financial markets meltdown we will not be able to rebuild them any time soon and we will be in for a debacle than almost no one living today has lived through. Markets and banks are tanking around the world just like they did in the Great Depression. Once that happens it will be like trying to put toothpaste back in the tube.  

    The bailout is not perfect but it would probably restore confidence in our markets and internationally which is critical now. There really is no time left. The bailout can be tweeked a little more, but if it doesn't work, I can't see what will.

    If the markets keep tanking this week, it may just scare Congress into acting. If not, then all bets are off.

    Once the immediate crisis is over it will be up to Democrats - both leaders and the rest of us - to wake the public up to the truth. We have been propandized since the eighties into believing that the radical individualism of Ayn Rand (Reagan was a fan and Greenspan was actually part of her inner circle) and Milton Friedman are the answer to everything. The results of implementing this policy have been failures, both under Reagan and now Bush, but still the public has not waked up. I believe that is because even though they know what we are doing isn't working, Democrats have not gained control over the economic debate.

    Nancy Pelosi got it exactly right yesterday when she put the blame on Republican policy, but her timing was bad. It has given pundits an excuse to focus on the ineptness of Congressional Democrats instead of the deranged behavior of Republicans. If we don't gain control of the debate, I fear it will take another Great Depression to wake us up.

    Parent

    You have no evidence that this bill (none / 0) (#155)
    by Militarytracy on Tue Sep 30, 2008 at 07:34:14 AM EST
    would have prevented a financial market meltdown of a cancer ridden financial market.  There is no way of knowing how much funny money is needed to prevent such a thing from happening.  They weren't even intending to release the cash this bill provided for weeks.  What are all of you people talking about?

    Parent
    That's what I want (none / 0) (#67)
    by Militarytracy on Mon Sep 29, 2008 at 11:53:48 PM EST
    countercurrents article (none / 0) (#174)
    by Xclusionary Rule 4ever on Tue Sep 30, 2008 at 09:21:08 AM EST
    The article you linked to says there are 4 problems:
    The first is that the financial institutions have all these toxic products--which they created--and since no one trusts anyone about their value, no one is willing to lend to anyone else. The Paulson approach solves this by passing the risk to us, the taxpayer--and for no return.

    If instead of assuming this risk, we do nothing, the downside is a credit freeze as I understand it.  My question is, what happened to globalization?  Can't Home Depot or whoever borrow short term from some bank in Singapore or Frankfurt?

    The second problem is that there is a big and increasing hole in bank balance sheets--banks lent money to people beyond their ability to repay--and no financial alchemy will fix that. If, as Paulson claims, banks get paid fairly for their lousy mortgages and the complex products in which they are embedded, the hole in their balance sheet will remain.

    Which "banks" are we talking about here with the bad balance sheets?  Commercial banks?  Retail banks? or investment banks?  If it's the latter, it's not my problem.  If commercial banks start failing, it shouldn't affect my 401k or my bank accounts, but my home equity will be unavailable and stocks will continue to plunge.  I will deal with that in exchange for seeing bankers get screwed.  

    The third problem is that our economy has been supercharged by a housing bubble which has now burst. The best experts believe that prices still have a way to fall before the return to normal, and that means there will be more foreclosures. No amount of talking up the market is going to change that.
     
    The equity in my home has already suffered and I couldn't sell my house now if I wanted to.  People starting out will have a buyer's market for housing. I can pay my house note.  There is a bankruptcy system for those who can't.  It's not fun but I don't see a mind-blowing crisis here if we just let their bubble burst normally.  Isn't that called the business cycle?

    The fourth problem is a lack of trust, a credibility gap. Regrettably, the way the entire financial crisis has been handled has only made that gap larger.

    Most people know not to trust Gordon Gekko.  As far as the administration's credibility gap, Bush is the boy who cried wolf.  We need a democratic landslide to make a point about honesty if for no other reason.

    Parent
    Stocks are just the tip of the iceberg (5.00 / 1) (#75)
    by denise k on Mon Sep 29, 2008 at 11:57:34 PM EST
    The real action is in the credit market, not the stock market.  If the company you work for makes its payroll using credit -- as many do -- and it can't tap into that credit and does not have the ready cash on hand, they may not be able to make  payroll.  If that happens, they will end up laying you off until they have the money or going into Chapter 11 bankruptcy or just going belly up.  That is the real nasty that could start to happen if there is no credit.  It is a much scarier problem than mortgage foreclosure.  As
    a Chapter 11 lawyer, I have seen on a micro scale, how quickly such a company can go under when a bank closes a line of credit -- it is practially instantaneous.  I don't know how close we are to this type of thing happening, but I imagine it won't be long before we start to find out.

    Stocks will come back if the credit markets hold.  If not, hold onto your butts...  

    Thank you! (none / 0) (#117)
    by gyrfalcon on Tue Sep 30, 2008 at 01:35:20 AM EST
    Why do you suppose that this absolutely elementary point is so impossible for so many otherwise reasonably intelligent people to get?

    Parent
    Debt for operations (5.00 / 1) (#149)
    by Munibond on Tue Sep 30, 2008 at 06:57:42 AM EST
    Maybe it comes as a surprise to most that a seemingly healthy company is borrowing its payroll.  I'd like one of the banking types here to explain how this became common practice and to describe any derivative instruments out there related to same.
    This is basically payday lending on a giant scale.

    Parent
    Yeah.... (5.00 / 1) (#164)
    by kdog on Tue Sep 30, 2008 at 08:34:44 AM EST
    if a company needas a line of credit to make payroll, they are halfway out of business already...no?

    The "on the arm" mentality is what is killing us.

    Parent

    Arrrgggh (5.00 / 1) (#170)
    by gyrfalcon on Tue Sep 30, 2008 at 08:54:46 AM EST
    No, it does not mean that.  Few businesses, here or anywhere, large or small, operate on a strictly cash basis.

    How can you possibly hope to have a rational opinion on the bail-out or anything else to do with the economy or the financial system if you're so, um, unaware of business realities?

    Parent

    I'm not the one in the red dude.... (5.00 / 1) (#173)
    by kdog on Tue Sep 30, 2008 at 09:14:23 AM EST
    It appears I am more aware of business realities than the so-called experts trying to put their hand in my pocket and help themselves to 2 grand.

    Parent
    Well I don't know (none / 0) (#144)
    by BernieO on Tue Sep 30, 2008 at 06:30:20 AM EST
    Could it be that the public doesn't get it because the media is focusing more on political tactics than they are trying to inform people why this matters? There is a reason that so many in the public oppose this.
    Right after the first meetings on the bailout I caught an interview that Wolf, head of the best political team in America, Blitzer had with McCain. His first question was if the meeting had been contentious. When McCain rightly tried to duck it, he wouldn't let go. He did not bother to talk about the substance of the bailout or why it was important, he just wanted to know if there was any juicy gossip to entertain us with.

    Parent
    The credit crunch in a nutshell (none / 0) (#180)
    by denise k on Tue Sep 30, 2008 at 10:21:45 AM EST
    That is what is going to happen everywhere.  Whether you know it or not there is a lot of "credit" used that we never think about.  One is a bank crediting you for funds on the check's say-so.  Now they are going to wait as long as they can to make sure the money follows the check.  They are acting like you or me, when we don't have enough money to pay all of our bills.

    Parent
    Simple living (5.00 / 1) (#116)
    by DeanOR on Tue Sep 30, 2008 at 01:35:15 AM EST
    We've lived kinda like students for many years and have saved and have some small ultra-conservative investments. Our used furniture, ancient van, walking and biking and public transit serve us well.
    We buy locally as much as possible, use a debit card or cash, don't have the latest of anything, shop at a food coop  and farmer's markets, and have no debts other than a comparatively small mortgage which is cheaper than renting. We finally have a community of neighbors who help each other out and live like we do. It isn't utopia, but it's okay.
    A lot of people have cut expenses as much as they possibly can and are struggling, but many people could benefit from simplifying and putting away the credit cards. We've been fortunate too. Our savings are what some people would consider pocket change, but we haven't had to dip into it or borrow. We truly enjoy what is considered voluntary simplicity in America (although it would be considered luxurious in a lot of places), and it's a good way to fight the system. Never too late to be a hippie - which is how some people view this. :)  Things could get pretty bad, but we don't have a lot or need a lot, so we don't worry about losing a lot - so far.

    Me. too (none / 0) (#121)
    by gyrfalcon on Tue Sep 30, 2008 at 01:41:01 AM EST
    But if my job goes away, I'm cooked.  Totally.

    Parent
    Jesus G.... (none / 0) (#175)
    by kdog on Tue Sep 30, 2008 at 09:21:16 AM EST
    have a little faith in yourself man, you are obviously a smart dude.

    Parent
    Sounds great (none / 0) (#184)
    by ChrisO on Tue Sep 30, 2008 at 01:05:12 PM EST
    but I'm guessing you're not trying to put a kid through college.

    Parent
    Time for a new (5.00 / 1) (#127)
    by DeanOR on Tue Sep 30, 2008 at 02:19:03 AM EST
    New Deal? HOLC? Nationalizing? The FDR programs didn't pass because everyone had become a progressive or studied political theory. They came about out of necessity. The way things are going, there could be a lot of support soon for measures that will really work. It would be nice it we didn't have to go through years of a Great Depression this time in order to get there, and maybe we actually learned something from that experience, and since then, about how to use government to help the economy. It can happen with enough pressure from the people to over-ride the lobbyists and the corporate politicians. The way it's going, people are getting out the pitchforks already, and it's about time. OK, use a temporary patch for now, but perhaps real change could happen, and soon.

    It's not good for just about anyone (none / 0) (#5)
    by andgarden on Mon Sep 29, 2008 at 11:05:05 PM EST
    Nothing student that I am, I don't have any net worth to speak of, but I know people who really got hurt in the last couple of weeks.

    And legions of them (5.00 / 1) (#11)
    by gyrfalcon on Mon Sep 29, 2008 at 11:10:10 PM EST
    have been calling Capitol Hill all day since the vote and screaming their heads off.  My dumbass Dem. rep in a safe seat voted against it, and his Web site and office phone have been tied up all day.  It's not because people are calling to congratulate him.

    I think, I hope, there'll be a very different environment in Congress on Thursday.  The question is whether it will be too late.

    The markets are expected to crash farther tomorrow than they did even today.


    Parent

    And (5.00 / 1) (#13)
    by Ga6thDem on Mon Sep 29, 2008 at 11:15:48 PM EST
    our party is going to take a hit over this. You can blame the GOP all you want but Pelosi failed therefore it hurts all Dems.

    Parent
    Nah (5.00 / 1) (#15)
    by andgarden on Mon Sep 29, 2008 at 11:18:02 PM EST
    This is going to hurt the Republicans more. Zero sum game.

    Parent
    Well (5.00 / 1) (#19)
    by Ga6thDem on Mon Sep 29, 2008 at 11:19:56 PM EST
    I disagree simply because Pelosi is the one that was supposed to deliver the bill. No one bought that it was the Dems fault when the GOP controlled everything did they? She got outsmarted by the GOP on this one. Then they go on vacation? How does that look?

    Parent
    You've gotta be joking (5.00 / 3) (#21)
    by andgarden on Mon Sep 29, 2008 at 11:21:08 PM EST
    Sorry, but there's no way the Republicans come out looking better, even considering Pelosi's incompetence.

    Parent
    Well (5.00 / 1) (#29)
    by Ga6thDem on Mon Sep 29, 2008 at 11:23:49 PM EST
    we'll just have to disagree but it's the conclusion I'm coming to based on the way the issue is being framed.

    Parent
    The idiot populists had their say yesterday (5.00 / 1) (#14)
    by andgarden on Mon Sep 29, 2008 at 11:16:01 PM EST
    and now the grownups will have to come in and clean up the mess. But in the meantime lots of people lost their shirt.

    I hope the "burn wall street!" mob is happy, because pretty soon they're going to be hurting too.

    Parent

    There was no way everybody wasn't going (5.00 / 1) (#17)
    by Militarytracy on Mon Sep 29, 2008 at 11:18:59 PM EST
    to be hurt.  The bill that didn't pass wasn't going to save us all from getting hurt, it was only going to save the big boys.  It did nothing for average people other than saddle them with more debt and a further degraded dollar.  I can't believe you keep reiterating this when it isn't even true.

    Parent
    Burn baby burn, but burn your own house first (5.00 / 3) (#24)
    by andgarden on Mon Sep 29, 2008 at 11:21:39 PM EST
    Please let the rest of us try to save ours.

    Parent
    where's your links to your economists (5.00 / 1) (#31)
    by Militarytracy on Mon Sep 29, 2008 at 11:23:55 PM EST
    saying this was going to help anyone in the long run.  All you are doing is repeating shock doctorine and look where shock doctorine got us.  NO MORE shock doctorine.

    Parent
    Sorry, MT (5.00 / 2) (#38)
    by andgarden on Mon Sep 29, 2008 at 11:27:37 PM EST
    but I think my Krugman beats your LaRouche.

    DO you understand that we got "shock doctrine" today when the House let the market melt down?

    Parent

    Krugman doesn't beat Roubini though (5.00 / 2) (#50)
    by Militarytracy on Mon Sep 29, 2008 at 11:36:32 PM EST
    when Krugman is also shooting from a political hip and hype and Roubini isn't......sorry but declaring that a bill is good enough in a desperate attempt to make some sort of political sense right before an election isn't the soundest economic advice to be given out there.  Krugman's interests aren't just economic, they are also political.  LaRouche is hardly the only economist I read out there.  LaRouche isn't the only one out there though spelling out clearly what needs to happen in order for the system to really actually recover but you seem to keep ignoring that.

    Parent
    Okay (none / 0) (#45)
    by Ga6thDem on Mon Sep 29, 2008 at 11:30:57 PM EST
    you see what now meant in another post? The house caused the market meltdown. And who rules the house? Even you are buying into that framing.

    Parent
    Who killed it? (5.00 / 2) (#49)
    by andgarden on Mon Sep 29, 2008 at 11:34:42 PM EST
    House Republicans.

    Parent
    Not selling (5.00 / 1) (#54)
    by Ga6thDem on Mon Sep 29, 2008 at 11:41:28 PM EST
    because the Dems run the house. This is the same strategy Bush used in the past. It doesn't work. People know who controls the house and the fact that Pelosi couldn't hold the Dems is going to be the story. McCain bears some of the fault because he couldn't deliver votes either but in the end the ones with the power have to take the responsiblity.

    Parent
    We'll see in November (5.00 / 1) (#55)
    by andgarden on Mon Sep 29, 2008 at 11:42:20 PM EST
    but I'm confident that I'm right.

    Parent
    I think it is incorrect to say (5.00 / 2) (#88)
    by Radiowalla on Tue Sep 30, 2008 at 12:16:28 AM EST
    that she "couldn't hold the Dems," since she delivered all the Democratic  votes that she promised.    What were not delivered were all the Republican votes that were promised by Boehner.  In that regard, she was rolled.  Here is Digby on the matter:

    "So, they are all saying that Pelosi blew it because you never bring a vote to the floor unless you have the votes. But what do you do if they lie to your face?"

    The Republicans delivered 10 fewer votes than promised.  Pelosi's mistake was in taking them at their word.  

    Parent

    Huh? (5.00 / 1) (#98)
    by BrassTacks on Tue Sep 30, 2008 at 12:47:13 AM EST
    Pelosi lost 94 democrats!  She couldn't deliver 94 members of HER party!  That's difficult to spin.  She pushed a bill that failed miserably, even in her own party.

    How many votes did Obama bring?  His own co chair, JJ jr, voted against it!  Lots of his people voted against it.  It doesn't appear that he did much arm twisting on this bill.  I have to wonder, did Obama really support this bill?  

    Parent

    The Congressional Black (5.00 / 1) (#145)
    by BernieO on Tue Sep 30, 2008 at 06:38:35 AM EST
    Caucus voted overwhelmingly against it. Obama was at a dinner with them over the weekend. That really does not look good for him. Surely he could have delivered more of them. Most of these guys are not in danger of losing their seats.

    I get that the Democrats would not agree to vote this in without significant Republican support, which is one reason they were not all going to vote for it. That matters for a couple of reasons, the most important of which is that bipartisan support is important to give credibility to the bill. That is what this whole thing is about - restoring credibility. Without that, all bets are off. If Pelosi had delivered all the Dems the bill would have passed, but if things are still shaky in November (which they will be no matter what) you can be the Republicans would have used this bill to regain control of the House. That is the last thing we need. I would rather see a Republican president with stronger Democratic control in both the House and Senate (not an impossibility) than have the House and/or Senate be returned to Republican control. That is where the crazies really have power.

    Parent

    A Black Congressman said (5.00 / 1) (#146)
    by stefystef on Tue Sep 30, 2008 at 06:47:37 AM EST
    "There has to be a better way".   This bill had too many holes and no one has said a damn thing about accountability.  Wall Street %*&$(% up and wants us to pay their bills???  Screw 'em.

    Interesting, the MSM talks about McCain not getting the House Republicans on board and in tow, but nothing about the Black Congressional Caucus voting against the bill and its reflection on Obama.

    Thank you for your post because I don't think many people knew the opinion of the Black Congressmen regarding this bill.

    Parent

    Re: CBC (none / 0) (#151)
    by wasabi on Tue Sep 30, 2008 at 07:05:31 AM EST
    Funny definition of "overwhelmingly"..

    I believe the vote was 21 yea, 18 noe in the CBC.

    Parent

    Re: CBC vote (none / 0) (#152)
    by wasabi on Tue Sep 30, 2008 at 07:06:09 AM EST
    That was 21 noe, 18 yea.

    Parent
    Pelosi (none / 0) (#139)
    by Ga6thDem on Tue Sep 30, 2008 at 05:52:26 AM EST
    should have known not to trust these people. And her stupid speech just gave them a reason.

    Parent
    And the 94 Demos who voted against it (5.00 / 2) (#74)
    by jimakaPPJ on Mon Sep 29, 2008 at 11:57:11 PM EST
    have no responsibility????

    Parent
    Shock doctorine is what has (none / 0) (#56)
    by Militarytracy on Mon Sep 29, 2008 at 11:43:22 PM EST
    propped up the markets artificially.  Today was the shock of truth doctorine.  It's like watching addicts hit bottom.  We can't keep propping up these things that can't be sustained in hopes that we can escape reality.  Well, we can but it leads to a more longterm pain.

    Parent
    See, that's what you're missing (none / 0) (#77)
    by gyrfalcon on Mon Sep 29, 2008 at 11:57:58 PM EST
    in the Paulson plan.  The whole point fo it is that it allows the banks and other institutions to fail in an orderly way if they have nothing more propping them up than the so-called "toxic waste."  It is a market-based solution, which is why I've been objecting to the term "bail-out."  It takes the crap off the books so everybody can see what the real balance sheets are, and then lets the chips fall where they may.

    Parent
    There wasn't enough money in the Paulson (5.00 / 1) (#79)
    by Militarytracy on Tue Sep 30, 2008 at 12:02:54 AM EST
    plan to do what you just explained when it comes to the bank failures we face, and just taking the crap off of the books really doesn't solve any economic problem......it can ferment hell for everyone though if it isn't handled properly.

    Parent
    One. More. Time. (5.00 / 1) (#106)
    by gyrfalcon on Tue Sep 30, 2008 at 01:17:44 AM EST
    It was NOT INTENDED to solve the economic problems, just the credit freeze.  You're right that it really wasn't enough to solve that entirely, but given the hysteria from people like you over the $700 billion, what chance do you suppose he'd have had asking for more than that?

    Parent
    People like you? (5.00 / 1) (#125)
    by Romberry on Tue Sep 30, 2008 at 01:49:17 AM EST
    Get a grip. The people who opposed this bill are not the ones in hysterics.

    Parent
    The whole (5.00 / 3) (#25)
    by Ga6thDem on Mon Sep 29, 2008 at 11:21:56 PM EST
    problem is that the GOP was the only one selling that idea. The Dem leadership decided to go with Bush on this one mostly.

    Parent
    You Might Be Right But the Markets ... (5.00 / 1) (#48)
    by santarita on Mon Sep 29, 2008 at 11:34:18 PM EST
    are saying otherwise.  The market started tanking as soon as it looked like the bill wasn't going to pass.  It started to come back when the vote was held open and then tanked further when it was clear that the bill wasn't passing.  Clearly the markets were disappointed.

    The bailout bill wasn't a magic pill and perhaps wouldn't do more than restore some stability and a sense that the problems are manageable even if the resolution will cause pain.  It sounds like market psychology and it is.

    A lot of fat cats got skinned today but so did a lot of ordinary people with IRAs and 401ks.

    Parent

    And anyone keeping up with (5.00 / 1) (#51)
    by Militarytracy on Mon Sep 29, 2008 at 11:37:23 PM EST
    insanity of the markets would have seen today coming.

    Parent
    Anyone who had company sponsored 401Ks (2.00 / 0) (#78)
    by jimakaPPJ on Tue Sep 30, 2008 at 12:02:44 AM EST
    had most of their retirement funds tied up in pre-tax mnoney...

    That meant that if they were younger than 55 and withdrew it they would pay a 10% penalty plus it would be taxed as ordinary income..

    So people held their money in stocks... and most people do not keep up with stocks the way you claim to.

    Parent

    Sure but that's not the point... (none / 0) (#70)
    by santarita on Mon Sep 29, 2008 at 11:54:33 PM EST
    the market expressed its view on the failure of the bailout bill.

    Has Roubini said anything about the bail out bill after September 24th.  I went to his site and haven't seen anything.

    Parent

    Other than him predicting a very severe (none / 0) (#85)
    by Militarytracy on Tue Sep 30, 2008 at 12:10:41 AM EST
    recession for at least 18 months and a big increase in unemployment during that time....and that's if we do everything right in addressing this crisis? I don't think he's shocked in the slightest that the markets are losing points dramatically.  I think he would be shocked right now if they weren't.  What I can't believe is that people think that things can be allowed to become this economically unstable and somehow none of us are going to have to feel much discomfort and if we do we can just blame it on some bill that wouldn't have really addressed any of this.  When are people responsible for what they invest in?  Did someone hold a gun to their heads and force them to give their money over to these investments?  When if ever should we expect someone to babysit us so we can stop being ultimately responsible for our decisions?

    Parent
    More from Delong (none / 0) (#89)
    by Manuel on Tue Sep 30, 2008 at 12:19:12 AM EST
    link

    The fact that there is a safety net in a financial crisis is something that has been obvious to everything with a spinal column for at least a century and a half--that's what central banks are for, for Jeebus's sake!


    Parent
    Anyone not knowing that the safety (none / 0) (#90)
    by Militarytracy on Tue Sep 30, 2008 at 12:21:05 AM EST
    net was failing wasn't paying attention.

    Parent
    As far as I know (none / 0) (#91)
    by Militarytracy on Tue Sep 30, 2008 at 12:23:10 AM EST
    the FDIC isn't going to fail any depositors and that's about the only safety net anyone was promised.

    Parent
    Fed >>> FDIC (none / 0) (#95)
    by Manuel on Tue Sep 30, 2008 at 12:33:15 AM EST
    Even Krugman said last night (none / 0) (#150)
    by Militarytracy on Tue Sep 30, 2008 at 06:59:10 AM EST
    that there is no need to panic.  Come on, Krugman wasn't freaking out last night losing his mind predicting ultimate doom for all small children and everyday doomsdayer on here quotes Krugman liberally.

    Parent
    Anyone not knowing that the Fed and Treasury (none / 0) (#92)
    by Manuel on Tue Sep 30, 2008 at 12:28:36 AM EST
    have been fighting against this for quite some time wasn't paying attention.  The crisis is real.  I support this plan because even though it is flawed it will have a positive effect on the situation and will at least stop the bleeding.  My ideal solution would be to nationalize the banks but the votes and public opinion wouldn't be there for it.  What's your ideal solution?  Roubini's plan?  Where are the votes for that?

    The republicans made a big mistake today.  I hope they pay a steep politial price.

    Parent

    I have zero votes for the Roubini plan (5.00 / 1) (#97)
    by Militarytracy on Tue Sep 30, 2008 at 12:38:46 AM EST
    I have zero votes for any plan. I don't think this bill was going to address the credit crunch though.  It is my hope, and right now all I have is hope, that the situation everybody comes back to work to on Thursday will leave no room for anything other than real solutions. No money turned over to fatcats and only focus on the credit crunch and effectively dealing with the toxic assets in a fashion that will end up making them pay for themselves. And somehow people must be able to find incentives to continue to pay their mortgages or they will walk away and things won't get better for any of us for a very long time.  I have zero votes for any kind of plan though other than the Paulson plan and I'm still glad there weren't enough of those.  Something better has got to come out of this than a bandaid on cancer that will only have voters feeling betrayed in the end.

    Parent
    This is where you lose me. (none / 0) (#103)
    by Manuel on Tue Sep 30, 2008 at 01:12:37 AM EST
    No money turned over to fatcats

    What do you consider turning over money to fatcats?  Short of nationalization, any injection of capital into the credit markets involves turning money over to fatcats.  Perhaps you mean equity in the bailed out companies but that is already in the plan.  Ditto for some safeguard of repayment to the taxpayers.  Executive ompensation?  Not as curbed as we might like but there is something there.  As Erik Liu mentioned, when the house is on fire you firt put out the fire and then you look for the arsonist and reform the fire code.

    Parent

    Some folks refuse (none / 0) (#109)
    by gyrfalcon on Tue Sep 30, 2008 at 01:26:04 AM EST
    to get that in a capitalist system, the "fat cats" always make out better than the rest of us, no matter what you do.  THere's no way to separate the "fat cats" from "the rest of us."  Anything that benefits us is always going to benefit them more.

    What's being advocated here comes down to cutting off your nose to spite your face.  Feh.

    Parent

    Sigh (5.00 / 1) (#123)
    by Manuel on Tue Sep 30, 2008 at 01:42:39 AM EST
    I do believe nationalization would work (as in Sweden) but I know that it is a political non starter at this point.

    The conservative Republicans live in a world that existed a lng time ago and some of our friends on the left live in a world that won't exist for some time to come.  Meanwhile, those of us in the real world ...

    Good night.

    Parent

    Continuing to do the next wrong thing (none / 0) (#148)
    by Militarytracy on Tue Sep 30, 2008 at 06:54:07 AM EST
    will get us no place.  I think people realize that and this event is coming together to create the perfect storm where the only thing left remaining may be to do the right thing that would involve the gov being given preferred shares in banks that we must help.  Even Krugman said it last night on Count Down.

    Parent
    Yes, with one modification: (none / 0) (#179)
    by KeysDan on Tue Sep 30, 2008 at 09:52:15 AM EST
    Republicans live in a world that they think existed long ago.......

    Parent
    And this crisis isn't even about the stock markets (5.00 / 1) (#64)
    by Manuel on Mon Sep 29, 2008 at 11:51:02 PM EST
    It's the credit markets that bear watching.

    Parent
    The market tanked at the open... (none / 0) (#126)
    by Romberry on Tue Sep 30, 2008 at 01:50:16 AM EST
    ...before the vote when it was widely expected to pass.

    Come on...get it right.

    Parent

    I can't believe you keep (5.00 / 2) (#52)
    by Manuel on Mon Sep 29, 2008 at 11:38:18 PM EST
    propagating this misinformation.  The bill that failed wasn't only going to save the big boys.  Getting credit flowing again would help main street.  I can understand being aginst the deal for principled reasons but some of the objections are not well thought out.  From Brad Delong (no fan of the plan).

    ... there is now no time for tolerance of the three objections to this analysis and this plan of action, roughly: (1) it's immoral, (2) it's unfair, and (3) it can't work in the long run.


    Parent
    Sorry but according to Roubini (none / 0) (#60)
    by Militarytracy on Mon Sep 29, 2008 at 11:46:04 PM EST
    whom you agree with, this bill wouldn't have touched the interbank credit crunch.  You are going to need a whole lot more money if you want to do that.  The money in this bill wasn't going to be going to the financial institutions that needed it in order to address the credit crunch.

    Parent
    That is not the point you were making (none / 0) (#87)
    by Manuel on Tue Sep 30, 2008 at 12:14:28 AM EST
    If you said this plan doesn't address the problem completely, I would have to agree.  I would contend that it is better than doing nothng and that it is the only politically viable plan in a situation where the clock is ticking.  You could then reply that doing nothing is preferable or that Roubini's plan is politically viable.  However you are proposing neither of these things.  You are asserting that the plan serves only the big boys which isn't true.

    Parent
    That's simply not correct (none / 0) (#28)
    by gyrfalcon on Mon Sep 29, 2008 at 11:23:11 PM EST
    You're right, everybody is going to get hurt, no matter what.  But the hurt will be massively more if something isn't done right away to loosen up the commercial credit market.  And you way, way, way overestimate how much the "big boys" could get out of this.

    Parent
    And top economists say that doing this (5.00 / 1) (#33)
    by Militarytracy on Mon Sep 29, 2008 at 11:25:28 PM EST
    immediate thing today was going to hurt us more in the longrun.  You show me an economist saying that this bill was going to help us in the longrun.

    Parent
    I don't know who qualifies as a (none / 0) (#53)
    by gyrfalcon on Mon Sep 29, 2008 at 11:38:38 PM EST
    "top economist," do you?

    Five seconds on Google got this, and there's plenty more where that came from.

    Somebody has bamboozled you on this "top economists" stuff.  (And I suspect the number of academic economists who actually understand how this brave new world of "securitized" mortgage instruments actually function in the markets isn't real high.  Give me a good working business reporter any day over a "top economist" on this subject.)

    And are you aware that Krugman has done a switcheroo and now supports, grudgingly, the Paulson bill?

    Parent

    For political reasons I'm sure (none / 0) (#61)
    by Militarytracy on Mon Sep 29, 2008 at 11:47:25 PM EST
    If it were for economic reasons I doubt he'd be grudgingly supporting it.

    Parent
    He opposed it initially for (none / 0) (#71)
    by gyrfalcon on Mon Sep 29, 2008 at 11:55:10 PM EST
    political reasons, so I don't doubt he switched for the same reasons.

    How about the main point of what I said, though?  Do  you know who's a "top economist" and who's a hack?


    Parent

    yes, isn't it you who would take a (5.00 / 1) (#76)
    by Militarytracy on Mon Sep 29, 2008 at 11:57:56 PM EST
    reporter or something over a top economist?  If all you listened to up to this point were reporters you were still in the market today.  I wasn't.

    Parent
    Once again, you duck the substance (5.00 / 1) (#107)
    by gyrfalcon on Tue Sep 30, 2008 at 01:19:43 AM EST
    I guess you really don't have the courage of your convictions, you just want to be able to rage against somebody, and Paulson et all are the easiest targets.

    Parent
    I guess you don't read much (none / 0) (#181)
    by Militarytracy on Tue Sep 30, 2008 at 10:32:17 AM EST
    The same grown-ups.... (5.00 / 1) (#165)
    by kdog on Tue Sep 30, 2008 at 08:39:35 AM EST
    who were too stupid to see the writing on the wall for the last 5 years?  The same grown-ups who slayed their golden goose through greed and incompetence?

    I'll put my lot in with the populist idiots, thank you.

    Parent

    No (none / 0) (#16)
    by Ga6thDem on Mon Sep 29, 2008 at 11:18:09 PM EST
    they're not. They are college students mostly. They live in a surreal environment.

    Parent
    I'm not a college student (none / 0) (#20)
    by Militarytracy on Mon Sep 29, 2008 at 11:20:02 PM EST
    That was a long time ago.

    Parent
    Well (none / 0) (#26)
    by Ga6thDem on Mon Sep 29, 2008 at 11:22:59 PM EST
    I was thinking mostly of the ones that hang out at Kos. Yes, I know you aren't a college student but I forgot about your opposition.

    Parent
    This bill was a bandaid on cancer (5.00 / 1) (#36)
    by Militarytracy on Mon Sep 29, 2008 at 11:26:45 PM EST
    As far as I'm concerned, your prescription (5.00 / 3) (#46)
    by tigercourse on Mon Sep 29, 2008 at 11:31:02 PM EST
    is to shoot the patient.

    Parent
    No, it was a tourniquet (5.00 / 2) (#47)
    by gyrfalcon on Mon Sep 29, 2008 at 11:31:09 PM EST
    on a bleeding limb.  Without it, we bleed out, and there will be no chance of fixing those mortgages or anything else.

    Parent
    Do No Harm (none / 0) (#182)
    by SteveSyracuse on Tue Sep 30, 2008 at 11:34:27 AM EST
    It's in the Hippocratic Oath. Sometimes it's better to let the patient heal himself rather than injecting medication HOPING it will do something.

    I see the Dow is up over 200 pts today. Sure, the credit market is tightening, but that is to be expected. Credit has been incredibly loose for so very long.

    The smart businesses that saw this coming and saved cash will do just fine. Others will eke through it. Others will fail. It's capitalism.

    Maybe the bill that needs to be passed is something to encourage lending...perhaps low interest loans. I'm no economist, but I've always thought this bill was working the wrong side of the problem.

    Parent

    I can (none / 0) (#42)
    by Ga6thDem on Mon Sep 29, 2008 at 11:29:22 PM EST
    understand that. I certainly had mixed feelings about it since it didn't have HOLC in it which would have made a huge difference in my opinion.

    Parent
    I went over to pajamas Media (5.00 / 2) (#80)
    by hairspray on Tue Sep 30, 2008 at 12:06:50 AM EST
    and clicked on to Karl Rove asking why certain Democratic congress persons voted against the bailout.  He claims that they were given a pass by both Nancy and Obama.  Nancy gave passes to liberal friends in California (Lee and Stark, for example) who no way will lose their seats.He gave more examples of that.  Then he said that Obama could have called on JJJr and a few other Chicago pols to vote for the bill.  Now that is an interesting insight.  What is going on. Its not that Karl Rove is insightful, but he did ask the question, why?  I have wondered as well.

    Parent
    Jeralyn, I am in the same boat (none / 0) (#8)
    by befuddledvoter on Mon Sep 29, 2008 at 11:08:59 PM EST
    I am watching mother's stocks plummet. (I also have none.) Your mother and mine may not live long enough to appreciate a real recovery.  That is the saddest thing for the elders and their savings.  

    Andgarden, this is supposed to have a dramatic effect on student loans.  So, you may feel this also.  

    Someone on CNBC a couple hours ago (none / 0) (#12)
    by tigercourse on Mon Sep 29, 2008 at 11:15:06 PM EST
    pointed out that in today's market drop alone, well over a trillion dollars was lost by investors. That makes the 700 billion dollars seem smaller.

    So, how much can the market drop (5.00 / 1) (#22)
    by Manuel on Mon Sep 29, 2008 at 11:21:28 PM EST
    before the 700 billion is equal to the lost revenue in dividend and capital gains taxes?

    The markets will be back eventually if our government does the thigs needed to restore confidence.

    And bear in mind that this crisis isn't really about the stock market.  It is the credit market we shold really be worried about.

    Parent

    That's a good question. When people (5.00 / 1) (#34)
    by tigercourse on Mon Sep 29, 2008 at 11:25:59 PM EST
    who own stocks in companies like Wachovia (as I did) or whichever institution is next to go get wiped out, the government is missing out on a fair amount of tax.

    Parent
    But when the institutions are insolvent (5.00 / 1) (#43)
    by Militarytracy on Mon Sep 29, 2008 at 11:30:00 PM EST
    what are we going to tax that is real.

    Parent
    Now I'm a 1000% in agreement with you (5.00 / 1) (#41)
    by Militarytracy on Mon Sep 29, 2008 at 11:29:01 PM EST
    and I want to focus time and energy on doing the right things to remedy this situation.

    Parent
    If investors did not sell... (none / 0) (#101)
    by Romberry on Tue Sep 30, 2008 at 12:58:20 AM EST
    ...then they still own the stock that they bought. They lost nothing unless they sold. It's called an unrealized capital loss (or gain if your stock went up.)

    I don't really care if the Dow dropped 770 points. The Dow NEEDS to drop. In the end, stocks always revert to the mean. In this case, that means that the Dow (after overshooting on the down side) should one day come back to its fair value of around 8500-9000 or so.

    Look, stocks have risk. They are not guaranteed. And this "plan" that was just rightfully defeated was not going to help.

    Parent

    Massachusetts banks have FDIC (none / 0) (#18)
    by befuddledvoter on Mon Sep 29, 2008 at 11:19:29 PM EST
    and "DIF."  DIF (Depositor's Insurance Fund) was state created in the 1930's and insures bank accounts in full.  Nice to know if anyone has extra money and looking to put it somewhere for safe keeping.

    How much can we afford to lose on paper (none / 0) (#27)
    by BrassTacks on Mon Sep 29, 2008 at 11:23:02 PM EST
    Or if we sell now, when the market is really low?

    We aren't going to sell anything now.  We're going to sit tight, so we aren't losing anything real, but it sure is ugly on paper.  

    If you don't need it now, just sit (5.00 / 1) (#37)
    by befuddledvoter on Mon Sep 29, 2008 at 11:26:49 PM EST
    Can it go much lower??  If you sell now, you have locked in your loss.  I hope I don't live to regret this advice.  

    Parent
    That's the same philosophy I have/had. (none / 0) (#40)
    by tigercourse on Mon Sep 29, 2008 at 11:28:28 PM EST
    But when the company your sitting on goes out of business, those paper loses get real, fast.

    Parent
    If the company is really (none / 0) (#62)
    by gyrfalcon on Mon Sep 29, 2008 at 11:50:06 PM EST
    about to go out of business, you won't get anything worth saving by selling.

    Actually, for folks who have any cash to gamble with, this would be a really, really good time to buy solid (non-financial, natch) stocks.

    In the realm of black humor, I gather Campbell's Soup was the only company whose shares went up today.  Arrgh.  If I have to life on Campbell's soup for the rest of my life, I don't wanna live.

    Parent

    Which is what I did today (none / 0) (#86)
    by CoralGables on Tue Sep 30, 2008 at 12:13:17 AM EST
    dropped more money into the market and perhaps will again tomorrow. Being single with a daughter on scholarship at college I can take those risks.

    The upside is long term profit. The downside of course is Ramen noodles and Campbell's soup. I'm easy, I can live with either outcome.

    Parent

    Good for you (none / 0) (#111)
    by gyrfalcon on Tue Sep 30, 2008 at 01:28:41 AM EST
    I wish I had the cash to spare to join you.  I think it's a pretty major opportunity.

    Parent
    Then again... (5.00 / 1) (#122)
    by CoralGables on Tue Sep 30, 2008 at 01:42:06 AM EST
    I may have underestimated the potential downside. Campbell's might be high society. It may be more like Heinz ketchup soup.

    Parent
    That is exactly the right thing to do... (none / 0) (#102)
    by Romberry on Tue Sep 30, 2008 at 01:00:32 AM EST
    ...unless you have reason to believe that one of the stocks you own is issued by a company that may go down. But I am glad to see that someone here understands that as long as you own the stock you bought, you haven't lost anything except an unrealized loss or gain on paper.

    Parent
    Here is the info on DIF banks (none / 0) (#32)
    by befuddledvoter on Mon Sep 29, 2008 at 11:24:32 PM EST
    http://tinyurl.com/48jas4

    Just click on member banks.  I think they have to be chartered in Massachusetts.

    This is very bad for retirees... (none / 0) (#68)
    by SomewhatChunky on Mon Sep 29, 2008 at 11:53:57 PM EST
    They can't sit and wait for it to come back.

    They need to take money out every year to live on.   The same living expenses coming out of a much smaller pool means they "run out" far faster.

    Many retirees had far more than they might have had historically in stocks because interest rates have been so low for so long.  They needed to try to earn enough to live on.   At some point everybody freaks and just "sells"  --be it down 20%, 30%, 40% or whatever - almost everyone has their breaking point.

    Even if Jeralyn is right and it "comes back" they and many others who sold won't be in the market to benefit.  They'll be net losers.

    I firmly believe the actions of our Congress today has made the problems far worse.  I blame them all.  Neither side can put their partisan views aside to do what is best for the country.  They can fix it Thursday.  That would help some, but lots of real damage was done today.  If not, this is going to get far far worse.

    to state what should be (none / 0) (#73)
    by cpinva on Mon Sep 29, 2008 at 11:57:00 PM EST
    blatantly obvious, but apparently isn't: no one's "losing" anything, unless they panic and sell.

    texas instruments is still here, IBM is still here, proctor & gamble, etc., all still here. if your broker urges you to sell, sell, sell(!), get a new broker, your's is an idiot. plus, he makes money on every transaction, regardless of how well you do.

    remember the "great fall" of '87? the market dropped roughly 300 points in one day. the sky was falling, the earth was breaking apart, great serpents roamed the land! except, well, they didn't.

    astonishingly, the next morning, everything was still there, and life went on. the market recovered (as it usually does, once the henny pennies are butchered and eaten), and things went back to normal.

    hang in there, and your investments will, for the most part (depending on what they are), recover their value.

    not so obvious (5.00 / 1) (#93)
    by denise k on Tue Sep 30, 2008 at 12:31:08 AM EST
    The stock market is really a distraction from the really big problem that will be coming down the road if IBM or TI or GM or your local grocer can't tap into their bank line to cover payroll or day to day operating expenses.  Then people might lose big even if they don't panic.  They will lose their jobs.  And sadly, their is nothing you can do about it.  Companies don't make all of their current expenses from cash on hand.  Cash flow is not that regular.  Credit smoothes over the ups and downs.  It is like blood in capitalism's circulatory system.  If it dries up, so does the economy.  

    Parent
    Don't faint (2.00 / 0) (#83)
    by jimakaPPJ on Tue Sep 30, 2008 at 12:10:03 AM EST
    but I agree... The market only lost 777 points. That's just a couple of days or so of 250-300 point  gains.

    Parent
    And just when do you anticipate (none / 0) (#115)
    by gyrfalcon on Tue Sep 30, 2008 at 01:33:51 AM EST
    those nice 300-point gains?  It ain't gonna be tomorrow, I can tell you that.

    Parent
    and the drop didn't (5.00 / 1) (#134)
    by cpinva on Tue Sep 30, 2008 at 03:18:19 AM EST
    occur overnight, either.

    It ain't gonna be tomorrow, I can tell you that.

    it's actually a cumulative effect, caused by more than just the (anticipated) failure of the "bailout" bill.

    some additional factors: 1,000's of jobs lost recently, in more than just the financial sector; lower-than-projected quarterly earnings of several DOW companies; the increased budget deficit projections for the current fiscal year, to almost half a trillion dollars.

    all this and more!

    so, while i don't anticipate a complete recovery of the market tomorrow, i do expect it to in the long run. to suggest that someone should know is, at best, delusional.

    Parent

    Well it's up 200 already and (none / 0) (#162)
    by supertroopers on Tue Sep 30, 2008 at 08:23:08 AM EST
    the market isn't even open yet.

    Try again?

    Parent

    I would be thrilled (none / 0) (#169)
    by gyrfalcon on Tue Sep 30, 2008 at 08:51:59 AM EST
    to be wrong on this, but it's a long day yet, so let's all keep fingers crossed.  There's something called a "dead cat bounce," and it'll be a while before we know whether that's what this is or not.

    Parent
    Don't know how it wll end (none / 0) (#167)
    by jimakaPPJ on Tue Sep 30, 2008 at 08:47:50 AM EST
    but this AM it's 225 up.

    Parent
    Looks like the Dow is up (none / 0) (#183)
    by SteveSyracuse on Tue Sep 30, 2008 at 01:02:59 PM EST
    350 points as of 2PM EDT. Would you like this plate of crow?

    Parent
    If you can't afford to lose ... (none / 0) (#81)
    by FreakyBeaky on Tue Sep 30, 2008 at 12:07:12 AM EST
    then get the F out of equities, now, or as soon as possible.  There are no safe havens I don't think, but this dude with a modest (oh all right, small) 401k suggests the most boring super-conservative capital preservation type of thing you've got access to would be a good choice ...

    The loss of wealth (none / 0) (#94)
    by Maggie on Tue Sep 30, 2008 at 12:32:17 AM EST
    is a real problem for retirees.  And I am sorry for what your mother is going through.  My own parents are in rather serious trouble as well.

    Frankly, our reliance on bubble-inflated assets (either stocks or homes) was always going to catch up with us.  And it was always going to be painful.  The scary thing about what's happening now is that it's very likely that the loss in that 'wealth' could be the first shoe dropping.  The second would be a hit on the real economy as a result of a credit squeeze following a collapse of the financial industry.  THAT would put a hurt on everyone.  We haven't had a serious recession in a generation, let alone a depression.  But we might get to revisit what that's like now.

    Ben Bernancke is the world's foremost scholar of the Great Depression.  His fear should be taken very seriously.  If the house can't get its act together very soon, we're going to test how good his assessment of the situation really was.  And I wouldn't bet against the guy.  Unfortunately.

    Don't panic (none / 0) (#99)
    by abdiel on Tue Sep 30, 2008 at 12:52:20 AM EST
    These are tough times for retirees, but ironically they should be the first to remind everyone that markets recover sooner or later.  The situation is bad, but it should provide an object lesson in wise investing.  

    This is also the time to remind everyone why they call economics "the dismal science".  The situation could be very grave, but most of the chatter here is purely speculation.  Yes, the country will be in a recession, which was politically delayed by Bush's fiscal stimulus.  But we aren't quite there yet and the government isn't out of tools to alleviate the pain.  

    If you can't afflord to lose, get out (none / 0) (#105)
    by Ben Masel on Tue Sep 30, 2008 at 01:15:35 AM EST
    of the casino.

    Well Ben, the whole economy (none / 0) (#108)
    by andgarden on Tue Sep 30, 2008 at 01:23:21 AM EST
    is the casino. the casino.

    I am not content to give live in the forest and eat squirrels. I have a feeling that most Americans aren't either.

    Parent

    Heh (5.00 / 1) (#119)
    by gyrfalcon on Tue Sep 30, 2008 at 01:38:51 AM EST
    I'm about to acquire a flock of chickens myself.  If I can't bear to have them butchered, at least I can eat the eggs.

    Squirrels, eh, not so much.  Although I do have one of those popcorn poppers Huckabee reminisced about.


    Parent

    Not true... (none / 0) (#166)
    by kdog on Tue Sep 30, 2008 at 08:45:12 AM EST
    believe it or not, some people make a living the old fashioned way...producing goods and services of value.  Not everybody is a bookie or gambler.

    Parent
    heh (2.00 / 0) (#168)
    by jimakaPPJ on Tue Sep 30, 2008 at 08:51:27 AM EST
    Name me two.

    ;-)

    Parent

    WSWS: nationalize the banks, without compensation (none / 0) (#110)
    by Andreas on Tue Sep 30, 2008 at 01:26:45 AM EST
    There is no reason to accept those developments.

    The WSWS writes today:

    The working class must put forward its own solution. The banks and major financial institutions which now threaten to drag down the economy and plunge millions into poverty must be nationalized, without compensation to their executives and big shareholders.

    These institutions should be transformed into public utilities, controlled democratically by the people, with their resources utilized not for the creation of profits for the rich, but rather for productive purposes, including the creation of jobs, a halt to foreclosures and evictions, the rebuilding of the social infrastructure and the funding of education, health care and other vitally needed social programs.

    Those directly responsible for this crisis, the Wall Street executives who oversaw fraudulent forms of financial manipulation that generated multi-million-dollar compensation packages for themselves, must be held accountable. Their assets should be confiscated and they themselves should be subject to criminal prosecution.

    The struggle for this program is possible only through the mobilization of working people in their own independent political party, fighting to replace the political rule of the banks and big business defended by both Democrats and Republicans with a workers government.

    Stocks plunge on Wall Street as bailout fails in Congress
    By Bill Van Auken, Socialist Equality Party vice presidential candidate
    30 September 2008

    You and what President? What Congress? (5.00 / 1) (#118)
    by andgarden on Tue Sep 30, 2008 at 01:35:31 AM EST
    Seriously, sometimes I feel like people should be required to take a pragmatism test before they say anything in public.

    Parent
    Very polite, Andgarden (none / 0) (#120)
    by gyrfalcon on Tue Sep 30, 2008 at 01:39:38 AM EST
    how's this? (5.00 / 1) (#135)
    by cpinva on Tue Sep 30, 2008 at 03:20:59 AM EST
    if you can't not say anything completely stupid in public, just please sftu!

    Parent
    Since when am I known for being polite? ;-) (none / 0) (#124)
    by andgarden on Tue Sep 30, 2008 at 01:45:16 AM EST
    Pragmatism (none / 0) (#186)
    by Andreas on Tue Sep 30, 2008 at 03:25:36 PM EST
    The current problems to some extent are a result of "pragmatism". More of the same will not help.

    It is obvious that neither the Republicans nor the Democrats will nationalize the banks. Those parties therefore are useless.


    Parent

    I've been all for nationalizing the (none / 0) (#132)
    by of1000Kings on Tue Sep 30, 2008 at 03:02:26 AM EST
    Banks ever since I've been old enough to understand our economic system...

    We need to forget about these trickle-down-economics (the mere name of which is offensive to those in the middle classes) and get back to believing in what the great Alexander Hamilton, Henry Clay and FDR believed....in the American School of Economics

    FDR:
    "Let us . . . highly resolve to resume the country's interrupted march along the path of real progress, of real justice, of real equality for all of our citizens, great and small. . . . There are two ways of viewing the government's duty in matters affecting economic and social life. The first sees to it that a favored few are helped, and hopes that some of their prosperity will leak through . . . to labor, to the farmer, to the small businessman. That theory belongs to the party of Toryism. . . . But it is not, and never will be the theory of the Democratic Party.

    "The people of this country want a genuine choice this year; not a choice between two names for the same reactionary doctrine. . . . What do the people of America want more than anything else? Two things: Work; work, with all the moral and spiritual values that go with work. And with work, a reasonable measure of security--security for themselves, and for their wives and children. Work and security . . . are the spiritual values, the true goal toward which our efforts of reconstruction should lead. Throughout the nation, men and women, forgotten in the political philosophy of the government of the last years, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth. . . . Those millions cannot and shall not hope in vain. I pledge to you, I pledge to myself, to a New Deal for the American people. This is more than a political campaign, it is a call to arms. Give me your help, not to win votes alone, but to win in this crusade to restore America to its own people"

    Henry Clay:

    "Two systems are before the world;... One looks to increasing the necessity of commerce; the other to increasing the power to maintain it. One looks to underworking the Hindoo, and sinking the rest of the world to his level; the other to raising the standard of man throughout the world to our level. One looks to pauperism, ignorance, depopulation, and barbarism; the other to increasing wealth, comfort, intelligence, combination of action, and civilization. One looks towards universal war; the other towards universal peace. One is the English system; the other we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world."

    it's amazing how relevant the quotes are for this day

    also, I do support the 'bail-out' (5.00 / 1) (#133)
    by of1000Kings on Tue Sep 30, 2008 at 03:07:17 AM EST
    as an emergency measure...

    also, I strongly believe that if done right the bail-out could actually make money for the taxpayers...

    the only problem is that considering it will be done by our crappy bureaucratic government that still somehow appallingly allows lobbying (talk about pulling the wool over our eyes) I doubt that it will be done right...

    if they put an intelligent, non-politician at the head of it (like a successful CEO) then maybe it could work..

    at any rate, I believe it is needed, as long as the provisions for equity/company stock are there as well as CEO payment restrictions...

    Parent

    Archie Bunker (5.00 / 1) (#137)
    by lentinel on Tue Sep 30, 2008 at 05:21:25 AM EST
    "We need to forget about these trickle-down-economics (the mere name of which is offensive to those in the middle classes)..."

    Archie Bunker referred to it as "tinkle-down" economics.
    Seems right on target.

    Parent

    Analysis (none / 0) (#136)
    by lentinel on Tue Sep 30, 2008 at 05:18:47 AM EST
    Some of the most coherent analysis of the fiasco in Washington was offered by one Peter Kane, getting a shave at Albert's Haircutting & Style in Santa Monica, Calif., the towel on his face puffing as he talked:

    "There's got to be some kind of bailout, but the bottom line is that I just don't trust these guys." Look at the Iraq war, he said. "Everything this administration has touched has gone to hell."

    Simple and concise.

    (From WashPo)

    Don't Lose It (none / 0) (#141)
    by john horse on Tue Sep 30, 2008 at 06:03:50 AM EST
    There was a cartoon in the New Yorker many years ago showing a rich man in his mansion handing his son a large bag of money.  
    The caption read "Son, here is a million dollars.  Don't lose it."

    When George Bush became President in 2001 he was like that boy in the cartoon.  He had a budget surplus, we were at peace, the economy was in good shape.  Then he lost it.

    Not the question, I would say (none / 0) (#156)
    by lambert on Tue Sep 30, 2008 at 07:38:15 AM EST
    The question is not "How much can you afford to lose?" but "How much will they be able to take?" Eh?

    Not for nothing... (none / 0) (#161)
    by kdog on Tue Sep 30, 2008 at 08:21:40 AM EST
    If you can't afford to lose it, you shouldn't be gambling it.

    How did it come to be that people believe the stock market, bonds, money markets and the like aren't gambling?  Granted, some gambles are riskier than others, but at the track the favorite only wins a third of the time.  There is no such thing as a sure thing.

    Money you need for food, clothing, shelter should be nowhere near the market.

    The vast majority of (none / 0) (#171)
    by jimakaPPJ on Tue Sep 30, 2008 at 08:58:13 AM EST
    stock investments are through 401Ks and IRAs.

    They became popular when it became possible to invest some ($10K?) pretax money and the company matched x percent in various funds.

    This started a trend from company funded retirements to personal funded retirement accounts.

    Parent

    I'm well aware.... (none / 0) (#178)
    by kdog on Tue Sep 30, 2008 at 09:28:47 AM EST
    an old job of mine had an employer contribution to a 401K, I closed that puppy out and ate the tax/penalties hit the day I left that job.  

    I paid the vig and walked away with something I can believe in...cash in hand.

    Parent

    That is your choice (none / 0) (#187)
    by jimakaPPJ on Wed Oct 01, 2008 at 10:21:43 PM EST
    but you didn't have to, and cash money pays no dividend unless you can use it to get into a higher stakes game..

    ;-)

    I moved out of some stocks and into money market accounts last summer/fall... had previously done some also... of the amount left I am about even if I factor in the taxes I would have paid vs the loss... which isn't a loss until I sell.

    kdog, you can not retire off Social Security and you can't do it off holding cash only. Get a good adviser who sells advice, NOT financial instruments and start preparing... trust me. You will either get old and retire or die... There are plenty of investments outside of the market.

    Parent

    seize the moment (none / 0) (#172)
    by sarany on Tue Sep 30, 2008 at 09:13:38 AM EST
    It takes courage and vision to recognize an opportunity, such as we may have now. History shows us that real leaders seize the moment and actually CAUSE historic shifts.

    I hope Obama has the stuff to do this. This is no longer about the election, but about a potential watershed moment for Obama, America and the world.

    wupps (none / 0) (#176)
    by sarany on Tue Sep 30, 2008 at 09:21:42 AM EST
    this was supposed to go in the FDR thread. Ignore it here, please

    Parent
    So far, Obama has seized very little (none / 0) (#177)
    by stefystef on Tue Sep 30, 2008 at 09:27:03 AM EST
    I am still trying to see what raising the FDIC is going to do to solve this problem.

    Would love someone to explain Obama's "solution" to me.

    Parent

    By itself it won't (none / 0) (#188)
    by jimakaPPJ on Wed Oct 01, 2008 at 10:25:10 PM EST
    It just adds confidence that your bank won't fail.

    And many individuals do have accounts of over $100,000 and so do many small businesses.

    Parent

    Are you kidding?! Seriously?! Good lord. (none / 0) (#185)
    by sarcastic unnamed one on Tue Sep 30, 2008 at 01:18:30 PM EST
    I don't have any investments
    That certainly explains why you take the stance you do on a whole number of issues.