The Sky is Falling! Or is it?

[blueskies]

So, I've been struck my how these huge catastrophic financial events are unfolding right now in the US, and how, around my neck of the woods, noone's talking about it. Are people talking about this in your area? What are they saying?

[Biciclista]

let's see. I went to a plant nursery today and the guy said that at plant warehouses they have immense numbers of plants that are not getting sold.
When i met my Italian tutor, she said no one is booking private lessons and the language classes are much smaller this year.
And when I tried to sell my car for blue book ($10,000 for a 4 door sedan) Someone made an offer for $5000. You've heard about all the unsold SUV's and Pickuptrucks.
houses are vacant all over the country.

I'd say things are REALLY bad and getting worse!

[Flur]

I used to work for Merrill Lynch and have quite a few friends working in the financial markets, so I hear about it a lot. People in that line of work are afraid for their jobs and are under a lot of stress because everything is so unpredictable (for traders, this makes it REALLY hard for them to do their jobs!).

I'm personally not all that worried about it. I'm very bullish on the market and in my experience that's typical for people my age (30-35) who work in the financial markets. Every dip in the market is a buying opportunity, a chance to get stocks for good long-term companies cheap. Now is the time to invest in the best and hold your cards for the return trip up.

[Zen]

I'd say the general populace isn't talking about bank bail outs because they don't understand them.

What they do understand is the gov't bails out big banks but not small businesses and it's impossible to fill up their gas tanks.
They understand they have to change their grocery shopping habits.

I think they're just hoping things get straightened out because there's nothing else they can do about it.

[Biciclista]

very well said ZEN!

I'd say the general populace isn't talking about bank bail outs because they don't understand them.

What they do understand is the gov't bails out big banks but not small businesses and it's impossible to fill up their gas tanks.
They understand they have to change their grocery shopping habits.

I think they're just hoping things get straightened out because there's nothing else they can do about it.

[blueskies]

I agree, Zen, that a large number of people have no knowledge of basic economics.

I wanted to put the size of this bail-out in perspective for myself--- how much is $700,000,000,000? The answer is that it is equal to more than 25% of the total US government revenues for 2007!
So, our congress is being asked (and seems willing!) to give the Secretary of the Treasury authority to spend the equivalent of 25% of all tax money raised last year to buy up "at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act."

We are going to buying bad debt at an extraordinary volume!

Further, the bill specifically provides for no review:

"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

I am deeply troubled.

[blueskies]

Not meaning to go all doom & gloom on everyone. Just feeling concerned about the state of the nation & planet that we are leaving for our young people...

[smilingcat]

hmmm...

The financial market has painted themselves into a corner.

Another nice way to put it is the feds and the treasury are caught between a rock and a hard place. And this is being very nice.

BTW, its not $700billion. The feds have pumped in over $600billion already and they are adding another $700B. This round of infusion will be more like $1trillion.

nope credit is really tight and everyone is sort of waiting for the shoe to fall off.

Most people are under the assumption that the federal reserve is part of the US govt. Well, its not...

I'm sure Mr. Silver being in the banking industry can say a few words. Maybe like me, he doesn't want to say too much.

I'm not saying much cause I already got into a huge drag out argument with a person who has demonstrated his complete lack of understanding how and why RTC was created to this latest bailout plan. I'm sort of expecting the federal reserve to issue a $500 note and a $1,000 note in not to distant future. These two denomination was available about 80 years ago... I think...

Lastly, I'm not counting on my social security at this point.

smilingcat

[Irulan]

I think it really depends on your personal situation. We have a disabled relative who is on a fixed income - you bet she feels it every time she has to decide on cat food or groceries for herself. The upcoming winter utility bill is already source of stress..

We follow the markets daily and are watching the kids college funds drop. They aren't for the long term so we see it more. The rest of it we'd like to hope is for the long term.

Also, housing is fairly stable in my community. It hasn't gone as high so the drops haven't been so bad.

[Aggie_Ama]

I notice it but I don't hear it much out of my neighbors. Maybe on a local scale with gas and groceries but I don't think they are as aware of the bank buyouts, mortgage mess, etc..... We all got homes when it was easy, most of us didn't have to put anything down. My husband and I bought smaller than we were approved for, our neighbors did not. Our household is still making cuts and doing things to stretch a dollar but some of our neighbors are buying camper trailers, new trucks, etc... Maybe they have a different situation than us, I don't know.

I think some people don't understand or just think it can't get worse. My husband is very worried, his nursery is slow because they aren't building new homes. They have been around for a long time and shouldn't have any issues with the economy but you never know. But he is worried about how much more the economy can fall.

And like Irulan said, my husband's grandmother is very aware. She relies on social security and what was left from the VA from her husband. She drives his old Dodge Dually but can't afford the diesel, she also can't afford to sell it and cannot take her sister (she has muscular dystraphy) to the doctor without a car. Against her pride she gets food from Angel Food Ministries.

[Irulan]

I do know this, being three months away from being mortgage free, with not other debt but a car payment, feels pretty darn good right now.

[Zen]

... I'm sort of expecting the federal reserve to issue a $500 note and a $1,000 note in not to distant future.

And one of these bills will have my photo on it

[Pax]

I agree, Zen, that a large number of people have no knowledge of basic economics...

So true, myself included. I know I just bought a house and have more debt than I've ever had in my life right now. I know my mom has it tough with an unsold home in FL and being stuck with the motorhome my dad wanted (payments on both). I know that if my honey and I can keep our jobs we'll be okay and will be able to help our moms...and that's pretty much all I know about economics.

I wish we weren't bailing out the banks, but with my limited understanding I think it means we might not end up in a depression which would cost many many people their jobs?

[Pax]

I just wrote my Senator and Congressional Representative, I want them to just STOP and take a breath before they "fix" the financial crisis. It's moving way too fast and being propelled by the same greedy idiots who got us into the crisis in the first place. Arrrrgggghhhh!

[Zen]

Good for you!
You're right, we do need to slow down and think things through before printing up money and throwing out the window.

I know it won't fix anything but I'd like to see some of these golden parachute boys be held accountable.