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RE: Economic Stimulus Package - 9/29/2008 8:50:07 PM
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Ps103
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Cranky, have you checked your 401k today?
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Fasten your seatbelts...it's going to be a bumpy night.
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RE: Economic Stimulus Package - 9/29/2008 10:24:43 PM
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GroupW
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I'm still hopeful we get a resolution here in the next 30 days or so. My opinion is the current administration framed this whole problem very poorly. It convinced people that we had to get a deal done RIGHT NOW or terrible things would happen. It then sent Paulson to the hill with a very poorly constructed proposal that was dead on arrival and contained provisions so anathema to American principles (namely the lack of judicial oversight) that it set everyone against it before it was even negotiated.
So you tell everyone it's "must pass" legislation, convince the market that things are more dire than they may actually be, raise the panic level and raise expectations that yes you will definitely get something done .... and then fail miserably to actually do it.
This is very poor communication, at best.
Given the way it was framed, I can't blame Cranky for having a jaundiced view of it. I read the bill - it was a fairly decent piece of work that tried to balance a lot of competing and mutually exclusive purposes. Unfortunately, it's very difficult to see that with all the smoke from the rhetorical fires flying around.
Really a pretty good effort for something that was negotiated by a committee. Remember that old joke about the camel being a horse designed by a committee?
I'm torn. On the one hand, I wished everyone had tempered the rhetoric such that there would have been less fear surrounding the whole issue, more debate, and more time to hammer out the best possible compromise. On the other hand, having set those expectations and raise the ante like they did, I'm dismayed that a reasonably good piece of legislation wasn't passed and left us exposed like that.
For the record - government intervention in commercial banking affairs isn't always bad. Take the RTC for example. The RTC was a repository for a lot of bad assets. Many of my friends were there in the early 90's doing workouts on commercial real estate deals. We learned a LOT. What came out of it was the Commercial Mortgage Backed Security (CMBS), first pioneered by the RTC folks, and a broad knowledge of what good credit underwriting really looks like. Unlike most of the rest of the market, CMBS have performed fairly well from a credit perspective and never really got caught up in the bubble quite like the residential loan community. Apparently we learned something that stuck. Unfortunately, in a crisis like this the guilty suffer along with the innocent and no credit is being given to the commercial mortgage community for not going completely bonkers over the past couple of years.
BT
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“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/29/2008 11:47:21 PM
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GroupW
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1) If authorized by Congress & subject to oversight, I have no reason to think it unconstitutional.
2) True
3) True, given how it was presented. The bill in it's final form wasn't too bad.
4) All things are or are unfortunately made to be political. Big deal. It happens.
5) In it's initial form, it was terribly ill-considered. In it's final form it wasn't too bad.
6) Maybe. Noone really knows. The risk if you are wrong is a very deep and painful recession that will cost lives. That's a grand little piece of hyperbole, but it's true and a fact that people forget. The uninsured that develop health problems receieve inferior or no care and suffer higher mortality as a result. Recessions are generally to be avoided if possible.
7) Good for you. We'd all be better off and have fewer and more shallow recessions if people behaved more like you.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/30/2008 12:09:20 AM
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Ps103
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quote:
don't have one. But, we are well-invested and diversified.
If I did have one, I'd check it once every 10 years.
As are we--and we still took a beating.
And we do not have the luxury of checking every 10 years--age, ya know?
_____________________________
Fasten your seatbelts...it's going to be a bumpy night.
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RE: Economic Stimulus Package - 9/30/2008 12:37:22 AM
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crankius
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quote:
And we do not have the luxury of checking every 10 years--age, ya know?
Well, yes, every 10 years was a bit of an exaggeration.
I'm sorry you took a beating. Praying you will be ok. Contrary to my name, I'm an optimist about these things.
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Do not be overly righteous, Nor be overly wise: Why should you destroy yourself?
Ecclesiastes 7:16
SYSTEMATIC THEOLOGY
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RE: Economic Stimulus Package - 9/30/2008 12:20:26 PM
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bzirk
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quote:
ORIGINAL: crankius
quote:
ORIGINAL: Ps103
Cranky, have you checked your 401k today?
I don't have one.  But, we are well-invested and diversified.
If I did have one, I'd check it once every 10 years. 
quote:
ORIGINAL: bzirk
Crankius,
Why are you glad it was defeated?
Bzirk, my concise answer:
it is unconstitutional
it ignores the law of unintended consequences
it is reactionary
it is political
it is not well-considered in the grand scheme of our free market system
it is unnecessary
when the fear of slowdown, recession, and even depression is waved about, I don't panic.
Did you want it to pass?
No, I didn't, and I agree with you. But I think there is a need to do something. What I'm not sure exactly. Still studying on it. What I find absolutely amazing is how dumbfounded everyone in the media nad in positions of power seem to be about not seeing this coming. That is stunning.
Hey, I'm not rocket scientist -- far from it -- but I do have some sense, and even I could see this coming for several years now and especially in the last two and a half to three years. I didn't need someone to tell me that the difference between incomes and housing cost could not be sustained. That doesn't take an economics degree, an accounting degree or being a market analyst to understand. It's common sense -- or should be.
_____________________________
may the God of hope fill you with all joy and peace in believing, so you will abound in hope by the power of the Holy Spirit. Romans 15:13
Great quote: I just ain't God and don't know it all. -- SonInMe1
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RE: Economic Stimulus Package - 9/30/2008 12:33:25 PM
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GroupW
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quote:
ORIGINAL: bzirk
Hey, I'm not rocket scientist -- far from it -- but I do have some sense, and even I could see this coming for several years now and especially in the last two and a half to three years. I didn't need someone to tell me that the difference between incomes and housing cost could not be sustained. That doesn't take an economics degree, an accounting degree or being a market analyst to understand. It's common sense -- or should be.
I got a chuckle out of that. This has been going on since about November of 2006 when the first major default waves started showing up. There was evidence of stress even earlier than that. That's going on 2 years now. Granted, we didn't realize in '06 how severe it was going to get and how much it would bleed into other sectors, but still ....
So we've had the evidence in hand for about two years. Back in 2004, I was offered the opportunity to run the desk for a subprime originator. I didn't like that asset class or business model back in '04 and turned it down. A reasonably astute person could have foreseen an issue at least as far back as 2004/5.
BT
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/30/2008 4:29:43 PM
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bzirk
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quote:
ORIGINAL: GroupW
quote:
ORIGINAL: bzirk
Hey, I'm not rocket scientist -- far from it -- but I do have some sense, and even I could see this coming for several years now and especially in the last two and a half to three years. I didn't need someone to tell me that the difference between incomes and housing cost could not be sustained. That doesn't take an economics degree, an accounting degree or being a market analyst to understand. It's common sense -- or should be.
I got a chuckle out of that. This has been going on since about November of 2006 when the first major default waves started showing up. There was evidence of stress even earlier than that. That's going on 2 years now. Granted, we didn't realize in '06 how severe it was going to get and how much it would bleed into other sectors, but still ....
So we've had the evidence in hand for about two years. Back in 2004, I was offered the opportunity to run the desk for a subprime originator. I didn't like that asset class or business model back in '04 and turned it down. A reasonably astute person could have foreseen an issue at least as far back as 2004/5.
BT
If someone just read the business page of the newspaper regularly, they might have had a clue. So this idea that the mainstream media and congress (thinking of Pelosi's speech and this thing sneaking up "on little cat's feet.") is ludicrous. They are stupid, or they refused to see it, or they saw it and let it happen anyway. Shaking my head as I write this.
_____________________________
may the God of hope fill you with all joy and peace in believing, so you will abound in hope by the power of the Holy Spirit. Romans 15:13
Great quote: I just ain't God and don't know it all. -- SonInMe1
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RE: Economic Stimulus Package - 9/30/2008 4:47:56 PM
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myka
Posts: 797
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quote:
So we've had the evidence in hand for about two years. Back in 2004, I was offered the opportunity to run the desk for a subprime originator. I didn't like that asset class or business model back in '04 and turned it down. A reasonably astute person could have foreseen an issue at least as far back as 2004/5.
Right. I'm with you all in wondering why the people in charge couldn't see it happening; I knew something was seriously wrong when the numbers were not adding up between income and housing prices (the answer was subprime mortgages). That was at the latest in '04. Lots of new homes were being sold to 'first time' home buyers, and the houses were pretty pricey.
quote:
If someone just read the business page of the newspaper regularly, they might have had a clue. So this idea that the mainstream media and congress (thinking of Pelosi's speech and this thing sneaking up "on little cat's feet.") is ludicrous. They are stupid, or they refused to see it, or they saw it and let it happen anyway. Shaking my head as I write this.
Me, too. I just wonder what world they live in...
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RE: Economic Stimulus Package - 9/30/2008 4:56:11 PM
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GroupW
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quote:
ORIGINAL: myka
quote:
So we've had the evidence in hand for about two years. Back in 2004, I was offered the opportunity to run the desk for a subprime originator. I didn't like that asset class or business model back in '04 and turned it down. A reasonably astute person could have foreseen an issue at least as far back as 2004/5.
Right. I'm with you all in wondering why the people in charge couldn't see it happening; I knew something was seriously wrong when the numbers were not adding up between income and housing prices (the answer was subprime mortgages). That was at the latest in '04. Lots of new homes were being sold to 'first time' home buyers, and the houses were pretty pricey.
quote:
If someone just read the business page of the newspaper regularly, they might have had a clue. So this idea that the mainstream media and congress (thinking of Pelosi's speech and this thing sneaking up "on little cat's feet.") is ludicrous. They are stupid, or they refused to see it, or they saw it and let it happen anyway. Shaking my head as I write this.
Me, too. I just wonder what world they live in...
For me, it was watching the percentage of no-doc loans climb. There's always a small subset of people who are in wierd situations and can't document income. It's always been very, very small. Suddenly as houses got more expensive, that percentage ballooned. Now we know exactly why. People were lying.
Well, duh. Why else would a person who can document his income, choose to pay a higher rate so he doesn't have to.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/30/2008 5:00:23 PM
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bzirk
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The signs are so many that I just can't swallow that none of our leaders knew. I do give McCain credit for trying to do something in 2005, and I give Bush credit for trying to do something in 2002. But hey, they didn't do enough -- not nearly enough.
BTW, I read that Obama got lots of money from Fannie Mae. Can't remember the figure but it was over 100,000. I'm sure most of you if not all of you have heard that. But do you know how much McCain has received from them? Are you ready? $862. Probably bought a nice lunch for him and his staff.
_____________________________
may the God of hope fill you with all joy and peace in believing, so you will abound in hope by the power of the Holy Spirit. Romans 15:13
Great quote: I just ain't God and don't know it all. -- SonInMe1
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RE: Economic Stimulus Package - 9/30/2008 5:13:26 PM
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GroupW
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The actual numbers are $165,400 for Obama, and $21,550 for McCain per the Center for Responsive Politics.
BT
Edit: Forgot to add - since 1989. Inclusive of both Fannie and Freddie. I'm not sure how misleading that could be since the totals include both corporate amounts as well as amounts given by employees acting as individuals. I need to parse out that last bit to make sure I'm not being misleading.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/30/2008 5:22:14 PM
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GroupW
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Yup. There were some errors in the CFRP figures.
1) First error was mine - Obama's total is $126k. Chris Dodd was the $165k.
2) Second error is the CFRP's blooper. The CFRP doesn't include contributions from directors and officers contributions as individuals or contributions from lobbyists working for Fannie/Freddie. If you add those amounts in, McCain's total would be $122k higher - approximately $169k. On that basis, McCain actually may have taken in more.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/30/2008 5:46:58 PM
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crownlaurel
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I had a full blown panic attack last night. Dizzy, shaky, loss of concentration, sinking feeling. Even had to take medicine for it. I'm not sure why it hit me so sharply and I am sure our recent personal health and gas problems and the resulting financial strain factored into it. We don't have any real stake in Wall Street right now and our home has had a fixed rate since we bought it 6 years ago, but still, if nothing is done, it will affect us all. I'd go put all my money in gold but it'd be so small I'd probably lose it on the way home.
Dh's company works with paper. They send chicken to stores and restaurants and then they get paid. They pay 2,000 employees and staff weekly and dh's check is direct deposited. If they can't get paid and credit in the US is frozen, dh won't get paid. If he doesn't get paid, neither do our bills. Grocery stores and small businesses may revert to "cash only" basis, which may not sound bad but all the money we have in banks doesn't really exist. It's passed around as figures on a computer screen. If we can only pay cash, there will be runs on banks and things can only get ugly from there. Sure this is a worst case scenario and may not happen, but as little confidence we have in "trickle down" economics, I can guarantee the downside will trickle down to the average joe faster than the upside ever did.
I think once people saw the original bill and heard the "no judicial" part, they were convinced this was evil. I don't think anyone stuck around to hear the rest of the negotiations, the lower initial investment, the insuring most of the loans, the cap on executive profit from this, or even that ACORN was taken back off the table.
If we let things bottom out, which could happen but we can always hold out hope it doesn't, forclusures will skyrocket. If people lose jobs and lose their homes, what do we do with millions of suddenly homeless jobless people. They are going to cost taxpayers money anyway..but wll it equal $700bil? Do we have the means to cover newly uninsured children because their parents lost jobs?
I can't even begin to fathom the possible ramifications of doing nothing here. I haven't the intelligence nor the time to work it out. But I have done enough reading on the subject the last few days to realize doing nothing may be the push we need to hit rock bottom. Then again doing soem of the things congress has tried to get passed may only be a last chance life support system only to prolong the inevitable.
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RE: Economic Stimulus Package - 9/30/2008 6:09:59 PM
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GroupW
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Hey Crown.
Don't let this little crisis ruin your health. It's not that bad. Here's why:
1) Congress is likely to pass the current bill with a few modest tweaks.
2) Our economy is fundamentally in much better condition than people often credit it for. Productivity is good, corporate balance sheets are healthy, unemployment is only slightly above the level we always used to think of as full employment, oil costs are abating, and commodities price inflation is slowing. Even the decline in home prices appears to be slowing down, finally.
3) While I support the bailout, it's not absolutely certain that we need it. People are worried about downside risks right now and just making sure the worst doesn't happen. The most likely outcomes aren't even close to those downside scenarios.
Don't panic.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/30/2008 9:15:02 PM
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bzirk
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quote:
ORIGINAL: GroupW
Yup. There were some errors in the CFRP figures.
1) First error was mine - Obama's total is $126k. Chris Dodd was the $165k.
2) Second error is the CFRP's blooper. The CFRP doesn't include contributions from directors and officers contributions as individuals or contributions from lobbyists working for Fannie/Freddie. If you add those amounts in, McCain's total would be $122k higher - approximately $169k. On that basis, McCain actually may have taken in more.
Where is the reference to those amounts?
Thanks.
_____________________________
may the God of hope fill you with all joy and peace in believing, so you will abound in hope by the power of the Holy Spirit. Romans 15:13
Great quote: I just ain't God and don't know it all. -- SonInMe1
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RE: Economic Stimulus Package - 10/1/2008 3:35:57 AM
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crownlaurel
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Thanks GroupW. It's just not good for people with anxiety disorders to watch the news. I think I was more affected by how and why the House voted the way it did. I was on the fence about the bailout and still am in some ways. Even in the worst case scenario we'd all be in the same boat so eventually life and prices and finances would re-adjust.
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RE: Economic Stimulus Package - 10/1/2008 12:12:47 PM
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GroupW
Posts: 2911
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
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quote:
ORIGINAL: bzirk
quote:
ORIGINAL: GroupW
Yup. There were some errors in the CFRP figures.
1) First error was mine - Obama's total is $126k. Chris Dodd was the $165k.
2) Second error is the CFRP's blooper. The CFRP doesn't include contributions from directors and officers contributions as individuals or contributions from lobbyists working for Fannie/Freddie. If you add those amounts in, McCain's total would be $122k higher - approximately $169k. On that basis, McCain actually may have taken in more.
Where is the reference to those amounts?
Thanks.
NY Times, and the FEC (Federal Election Commission). You can also search on the CFRP numbers and get some independent analysis of them to verify the exclusion of directors' and officers' contributions.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 10/1/2008 12:17:22 PM
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GroupW
Posts: 2911
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quote:
ORIGINAL: crownlaurel
Thanks GroupW. It's just not good for people with anxiety disorders to watch the news. I think I was more affected by how and why the House voted the way it did. I was on the fence about the bailout and still am in some ways. Even in the worst case scenario we'd all be in the same boat so eventually life and prices and finances would re-adjust.
I agree with you - the news (what passes for news at least in this country) doesn't do anybody much good. If you really want to know what's going on, the LAST thing you should do is watch the news!
No problem being on the fence on this - there are some significant issues at stake. Being on the fence usually means you're at least thinking about it.
Worst case, yes, we'd all be in the same boat and we'd muddle through. Things would work out for most folks. Some folks would never recover, some folks would hardly notice, and a few that were in the right place at the right time would prosper. What we don't really know is how bad the economic suffering could get and what it's worth to us to avoid that possibility. Those remain judgement calls.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 10/3/2008 10:42:23 AM
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bzirk
Posts: 2949
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From: Where the deer and antelope play
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quote:
ORIGINAL: prophet
including $500 billion in tax rebates -- that could work.
What?!! The government gives back our money and lets us determine what to do with it?!!
Sadly, I would die if I held my breath on that one.
This mentality that the government knows best is exactly what's wrong with our country. Too many of us have bought into that, and now look at all the "conservatives" who are for this bailout when there has not been any substantive discussion about exactly what is wrong. Lots of speculation but not real substance -- just scare tactics, which have impacted investment.
_____________________________
may the God of hope fill you with all joy and peace in believing, so you will abound in hope by the power of the Holy Spirit. Romans 15:13
Great quote: I just ain't God and don't know it all. -- SonInMe1
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RE: Economic Stimulus Package - 10/3/2008 2:57:44 PM
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reach
Posts: 1338
Joined: 4/12/2005
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So, just curious what your opinions are of the new bill that passed and how it will effect us.
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RE: Economic Stimulus Package - 10/3/2008 4:38:52 PM
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bzirk
Posts: 2949
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From: Where the deer and antelope play
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I'm not too excited about the government taking over all that bad paper. They are the ones who were asleep at the wheel and that mostly because they have no vested interest in being alert to what may be a problem for the average taxpayer. Besides, most things the federal government takes charge of are not run well at all. Why should this be any different?
How this will affect the economy I'm not sure. I'm still not convinced that by not passing this that things would have been a catastrophe. Rough? Probably. But an utter melt down? I'm not so sure.
I do think this is a sad commentary on how addicted to credit we've all become (individuals, businesses, the government), and that begs the question of where this 700 billion is going to come from. Is it really going to be a mere changing of the balance sheet for these companies with the government acting as guarantor? Sounds to me that even if no money has exchanged hands that the taxpayers are on the hook and about the last thing taxpayers need is to be hit with a tax hike to pay for this. So where is the money going to come from?
_____________________________
may the God of hope fill you with all joy and peace in believing, so you will abound in hope by the power of the Holy Spirit. Romans 15:13
Great quote: I just ain't God and don't know it all. -- SonInMe1
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