Real Estate Investor · Las Vegas, NV · Member since 2008 · 1k+ posts · 447 votes
We may be witnessing the largest financial collapse in centuries. Take a step back and look at what is happening:
ï‚· Subprime meltdown
ï‚· Housing bubble
ï‚· Foreclosure crisis
ï‚· Bear Stearns collapse
ï‚· Countrywide Mortgage rescue
ï‚· Fannie Mae & Freddie Mac bailout
ï‚· Lehman going under
ï‚· Merrill Lynch takeover
ï‚· Wamu in trouble
ï‚· Wachovia in trouble
ï‚· Citibank at risk
ï‚· Banks pool together $70 BILLION to shore up liquidity
The financial & banking system is being held together with bubble gum and bailing wire. The government is like the Little Dutch Boy trying to plug the holes in the dike that is our financial system. The Fed is probably going to cut rates again. Watch out for the falling dollar….again.
We all were taught about the Great Depression in school, our kids and grandchildren will be told about this in history class. Lucky us, we get to live through it. It makes you wonder why ANYONE is running for President, this is all going to land squarely in the lap of the next administration.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
18y
I'm not sure why you say the RTC didn't nationalize debt. RTC took over the debts, and the their collateral, from a bunch of failed S&Ls. It was a government sponsored entity. How is that not nationalization?
Agree that there are very likely to be significant opportunities as this shakes out.
Property Manager · coarsegold, AL · Member since 2008 · 2 posts · 0 votes
18y
Unfortunately, with all this money the Government is creating to bail out these companies, there is nothing backing it. At one time, for every dollar out there, there was gold behind it (kind of like a mortgage has a home as collateral behind it,) till Nixon took us off the gold standard. Now money is made out of thin air. Therefore, our dollar is really worthless. If one was to call the loans the government has made, there is nothing there. What a disaster!!
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
18y
Yes, it's nationalization - pure and simple. The taxpayers are on the hook and the big banks are not.
The government is in panic mode - just announced a ban on short selling 799 stocks (not the uptick rule, but shortselling!) A guarantee of money market funds (more socialization).
Welcome to the United Socialist States of America!
Real Estate Investor · Georgetown, MA · Member since 2008 · 250 posts · 6 votes
18y
Well it certainly sounds like RTC is only temporary fix.
It helps the corporations but it screws the common folk....thats just great.
Depending on how long this credit crisis last it may over lap with the doomed Social Security system, that is on overload...soon to break. How about health care....
These 3 things could really take us down for quite some time.
Property Manager · Corolla, NC · Member since 2008 · 10 posts · 0 votes
18y
Originally posted by Taz:
As for the stock market in general, you can't really compare the diversification in the asset markets of today with the lack of it in the 1920's leading up to the crash in 1929.
What is "happening" in the markets is more hype than reality. The credit default swap market is the tail wagging this dog at the moment.
Taz,
I did not have the patience to cut and paste all the assertions you made. I believe you may be a little off. The numbers you were quoting about unemployment are completely untrue. You need to look at the change in unemployment rating since the Clinton administration. The pool of unemployed workers was intentionally shrunk to not include those "not looking for work". If you live in an area with no jobs, then the government does not count you, if you do not go to the unemployment office. Does that mean you are still not unemployed?
Let's look at the CPI. Under Greenspan they began twisting CPI. Instead of a steak to steak comparison they said in economic downturns people buy hamburger instead of steak so thus the CPI has gone down or is unchanged. That would not be exactly true now would it? The cost of steak has risen now I am forced to pay more, thus the CPI has changed.
All these takeovers are socialism/nationalism. Call it whatever you want but if it walks and quacks like a Duck.
I think you need to understand that all this money they are creating does nothing but add to inflation. You can't add more of something without diluting the existing. I recommend reading Theory of Money and Credithttp://www.econlib.org/library/mises/msTContents.html or What Has Government done to our money http://mises.org/money.asp