The market is going to spiral....

[TheEnforcer]

The vote for the bailout just failed in the House of Representatives an the market is reacting badly... down nearly 600 points as I look on tv right now...

[miz_wright]

The vote for the bailout just failed in the House of Representatives an the market is reacting badly... down nearly 600 points as I look on tv right now...

Well, not quite - the vote expired, but hasn't been closed yet.

[RawAlex]

Congrats to the house republicans for being some of the biggest self-serving idiots that have ever come down the pipe. Anyone voting for a republican next money needs to really check themselves for a pulse.

[Hell Puppy]

My 401K sent me an invoice this afternoon.

[TheEnforcer]

That was a TON of market loss yestersay.. coming back up a bit today...

[Hell Puppy]

That was a TON of market loss yestersay.. coming back up a bit today...

I'm afraid to total up and see how much I've actually lost.

I'm well diversified and have investments outside of stocks, but it still stings.

We're all doomed to work until we're 70+ it seems.

[softball]

The third-highest point gain ever for the blue-chip measure comes on bets that a bailout plan can get passed.


Live by the sword, die by the sword. Fuck the bail out.

"you gotta know when to hold 'em, know when to fold 'em. Know when to walk away and know when to run......the best that you can hope for is to die in your sleep"

[miz_wright]

I'm afraid to total up and see how much I've actually lost.

I'm well diversified and have investments outside of stocks, but it still stings.

We're all doomed to work until we're 70+ it seems.

There's a lot of noise about the size of the drops, but frankly, the best thing is NOT to look and total up. If your asset allocation strategy is sound, look at where we were in 2002 vs late 2007: there are easily visible trend lines, and the market is doing what it always has.

[EmporerEJ]

There's a lot of noise about the size of the drops, but frankly, the best thing is NOT to look and total up. If your asset allocation strategy is sound, look at where we were in 2002 vs late 2007: there are easily visible trend lines, and the market is doing what it always has.

And remember, you haven't LOST anything, unless you sell now.
If you made wise decisions, they will come back.

[Greg B]

I weepeth the fuck not.

We wrote about this shit over ten years ago. Had radio shows, websites etc. warning people but we got called "conspiracy theorists" and "tinfoil hatters". Well our opponents the "Asshats" sure are wearing shit on their face because they're shit-for-brains.

To even conceive of the fact we're actually discussina a financial mess of this magnitude is testament enough to the throwback mentality that pervades in this country.

People now have their entire nesteggs wiped out and now we want to spend the last remaining surplus to bail out the companies that started this shit in the first place? Sounds like the cherry on top of a fuck you sundae.

[softball]

The whole thing is pretty simple really. The country is living on a giant Visa card, spending money it doesn't have. Americans cannot afford the lifestyle they are living. You can't prosecute a big war, drive big cars, put rockets into space, live in big single family homes, consume massive amounts of protein, take exotic vacations in big boats and expensive airplanes, educate your kids in good universities, pay exorbitant salaries to doctors and dentists all on the money you earn as a nation. That is pretty obvious. No matter what the astrologists....er, excuse me "economists" say. And on top of all that, you can't export all your manufacturing to off shore countries to build stuff for you. That you have to do yourselves. As we all know, the more control you take over your business and the more you do the work, the more money you keep. Am I off base on this?
Oh yeah, the solution. Pay down the debt. How? Higher taxes. Painful but obvious.

[Hell Puppy]

There's a lot of noise about the size of the drops, but frankly, the best thing is NOT to look and total up. If your asset allocation strategy is sound, look at where we were in 2002 vs late 2007: there are easily visible trend lines, and the market is doing what it always has.

Yup, I never react even when paper statements come. I rebalance once a year, usually toward the end of the year, so I know what it will do to my taxes. Other than that, I'm buy 'n hold for the most part.

I'll do some short term buys, but those have specific agendas. Like I loaded up on gaming equipment stock after Katrina wiped out all the gulf coast casinos. Made a quick 50% in 6 months as they had two great quarters.

Panic sells only lock in your losses.

[softball]

Yup, I never react even when paper statements come. I rebalance once a year, usually toward the end of the year, so I know what it will do to my taxes. Other than that, I'm buy 'n hold for the most part.

I'll do some short term buys, but those have specific agendas. Like I loaded up on gaming equipment stock after Katrina wiped out all the gulf coast casinos. Made a quick 50% in 6 months as they had two great quarters.

Panic sells only lock in your losses.
Too true. However, it is a great time to move property. Sell low, buy low and wait a couple of years.

[RawAlex]

People now have their entire nesteggs wiped out and now we want to spend the last remaining surplus to bail out the companies that started this shit in the first place? Sounds like the cherry on top of a fuck you sundae.

Greg, this is sort of the most misleading statement of all. Nobody is lining up to bail out the companies that started it in the first place because they want to bail out the rich and fuck John Q Public, but because there are few other ways to get it done.

The markets (stock, housing, and much of the business world) is over leveraged, entirely dependant on borrowed money. Maintaining those position is almost entirely dependant on being able to get re-financed every so often. Most of us experience this when we buy a house with a renewal mortgage.

Long story short, the companies that lend money don't have any more to lend. They have too many assets on their books that are not liquid, and they can't lend any more. So much stuff has turned illiquid at the same time (and a significant part of that comes from those horrible mortgages that have turn tits up, aka John Q Public's house).

Some people suggest "just let them go broke". Well, that doesn't work, because it ends up wiping out huge amounts of value and huge potential sources of future lending activity. Without lending, companies (most large companies work on lines of credit, credit covenants, and other financial instruments for day to day operations) won't be able to make payroll for very long. They can't buy things. Poeple won't buy houses, cars, or hardgoods because they can't get credit, can't afford it, and can't take the risk that they will be unemployed tomorrow.

So sadly, the choices are limited. The bailout as projected basically goes in there and buys up illiquid assets, and attempts to lubricate the system while companies work towards unleveraging themselves. As a whole, the US economy is too dependant on credit to operate, and many companies have gotten such a scare now that they are going to have to look at ways to operate more on their own funds and less on borrowed money.

It is signficantly more complicated than this, you have to look at all sorts of things like low interest rate loans (sub prime), companies in the last 5 years that have been bought out by taking on huge amounts of debt, companies borrowing money to invest, etc. It traces back as much to John Q Public being silly enough to think that $10 an hour wal-mart wage slaves can somehow afford a $300,000 house, using financing tools that assume huge increased in value to pay for it all. There are hundreds of issues out there.

So no, the bailout isn't to reward the fools that fucked it up, but to save ordinary Americans from the fools that fucked it up.

[Hell Puppy]

Too true. However, it is a great time to move property. Sell low, buy low and wait a couple of years.

Oh yeah, I have my eyes out for investment opportunities. I dont mind sitting on property for 5-10 years or more, so would love to grab a couple of rental properties.

I would even look at some businesses, but I'm limiting my scope there to things people HAVE to have. Only a fool would buy a business that sells goods or services that most people would consider a luxury or frivolous right now. Those are the first areas of the family budget that get cut.

[Toby]

Oh yeah, I have my eyes out for investment opportunities....

I'll continue to do what I've been doing for the last several years. Much of my investment dollars have gone to antiques, primarily glassware. That market has been extremely soft for a number of years and is still on a decline. It's a buyers market. Like any other investment, you have to know what you're buying in order to avoid a pig in a poke.

[softball]

Oh yeah, I have my eyes out for investment opportunities. I dont mind sitting on property for 5-10 years or more, so would love to grab a couple of rental properties.

I would even look at some businesses, but I'm limiting my scope there to things people HAVE to have. Only a fool would buy a business that sells goods or services that most people would consider a luxury or frivolous right now. Those are the first areas of the family budget that get cut.

Housing prices around here have dropped significantly. The average price of a house in a decent neighbourhood in June was about 1.3 million dollars for an older small family home. Now you can get the same place for about 900K. The interesting thing is how many houses in the 2 to 3 to 5 million dollar range are on the market at the moment. You would think that those folks wouldn't have to sell in a shit market. However, who knows what evil lurks in the portfolios of men.