SuperEconomics

[jl3969]

also, i would like to propose a quick and easy drinking game to ease the pain: shot everytime someone on CNBC says 'main st'.

pretty sure i'll be hammered in 5 minutes.

[ProfMonnitoff]

where did this fucking main st catchphrase come from

ive never heard a politician say it until like 2 weeks ago

[constant struggle]

It has been around since before you were born

[broneck]

this thread is gay. that being said, sarah palin kindof summed up what is wrong with the current mentality of the republican nominees, and US corporations in general...when posed the question "How do you feel about a moratorium on mortgage foreclosures until this is sorted out?" she replies "Well, certainly there are pros and cons to that idea, but we can't reward people for making bad choices."

This may actually be the worst answer in the history of politics, because it essentially confirms everyones worst fear of a third republican term - sure, we can give free money to corporations, but mention handouts for the general public and we're rewarding bad decision making...how is bailing out the big banks not exactly the same thing?

[Thorns]

This thread is called SuperEconomics not SuperPolitics^

That being said... in response to you, we can't afford either bailout.

[broneck]

economics and politics are intrinsically linked. what do you mean by "either" bailout? how could creditors not afford to reign in and slow down foreclosures in order to help shore up that failing sector of the US economy?

[jl3969]

wait arent you from canada?

[broneck]

does that mean i shouldn't be concerned with the state of the US economy?

[Blicero]

they simply forgave about 7k cause i stated that i'd never be able to catch up as i was 8 months late paying. they didn't erase principal but killed off a big load of interest.

So, I just tried this with my student loan guy.

He told me to pound it.

"In the 17 years I've been here, I've never once heard of them doing that."

[kunk75]

perhaps the pics i sent of myself laying in my loan guys bed and playing with a machete was the deal maker.

[goat]

go to alberta. we need you there. tim horton's pays $25/hr.

expect that to change by the end of the year

The US economy has such a huge impact on Canada that it will (temporarily) halt the boom in Alberta (our exports dropping, price of oil dropped huge yesterday, mfg'ing slowdowns).

If only life were as black and white as economic theory is, i'd just do a lot of borrowing in a couple of months cause the interest rate is going to drop.

Gonna be a fun year ladies and germs. if we do ultimately crash, expect me to be right in the middle of the market investing for dirt cheap and holding those stocks. Only one place to go after we hit rock bottom.

[skistar]

economic theory is fucking awesome...

real life however hardly works the way it "should"

thorns and salary are both spot on with the need for our government to let big business' and banks fail. It's the only way to make thing right in the long run. All this "bailout" shit is mainly to restore confidence for all the people freaking and dumping their stocks/pulling cash from banks/ect.

I'm not really too concerned, I just started my 401k (I'm 24) and I'm not retiring for 30 years. As long as you're still purchasing well diversified funds and investing for the long term (greater than 10 yrs?) there really isn't too much to be concerned about.

yet.

[broneck]

rOVXh4xM-Ww

THEY KNOW NOTHING!!!!

[jl3969]

jim cramer is awesome. he yells and has goofy sound effects. and hes right sometimes

[Seething Tortoise]

I don't understand this economy shits, never really my strong point.

But what's so bad about this bailout, other than it costing the US taxpayers a shitload to pay it off? If you need it to save your banks, shouldn't it be a good thing? I mean, you restore confidence in the banks, investors pay in again and all is gravy. You don't instill confidence and the banks end up going under.

People's savings go with them and everyone ends up down shit creek.

[kunk75]

your money is insured up to 100k by FDIC. if a bank goes down your money is safe.

[constant struggle]

Listen

1) Cramer is a total moron

2) The economy built on debt cannot function forever

3) We are trying to prop up the market with more money which won't work

4) The media is trying to instill fear to everyone on Main Street

5) Ron Paul is the man

6) The Derivatives market is a whole nother laughing matter

7) Being that the taxpayer is buying this at a price which isn't marked to market, we will be paying too much and won't retrieve the money (inflation will kill us if we do)

8) If you are debt free you will be better off than most

9) Housing prices are still historically too high, median house price needs to be 3x median income, from 2001 to 2007 median house price went up 65% whereas median income only went up 16% - this is a huge disconnect

10) The government cannot dely the inevitable, the market needs to correct itself, supply and demand will win

11) The LIBOR Rates are getting quite scary (if they keep going up no one will be lending at all!)

12) The Feds need to raise the rate and save the dollar

13) I'd rather have a quick downturn recession than a long slow painful one.

14) Thx for reading

15) Word is Bond.

[constant struggle]

your money is insured up to 100k by FDIC. if a bank goes down your money is safe.

What happens when we need to bail out the FDIC where they cannot pay the 16 trillion in deposits if most major banks fail?

Also it is 100K per type of account

(Single, Joint, Retirement, the Revocable Trust Accounts)

Also Kunk you aint a balla? 100K in the bank is nothing if you were a true balla

[broneck]

I somehow don't think that jim cramer is really that much of a moron. but mostly, the video was posted because it was hilarious.

[constant struggle]

Cramer is a huge moron, if you wanted to make money during the bull cycle, basically you should have done the exact opposite of what he said.

Cramer is basically an entertainer, his opinion is worthless.

[Seething Tortoise]

your money is insured up to 100k by FDIC. if a bank goes down your money is safe.

Ah reet. Cheers kunk

It be like in the UK then, but I remember someone telling me you're only insured for 30k though. Which is still quite a fair amount, fucked if you're a millionaire and your bank went under.

[constant struggle]

Well that is why you need to be in multiple banks...

Also lets give this example, you and your wife can be insured up to 400K

How???

Two single accounts each in one of your names

Mary Single Account insured up to 100K

Joe Single Account insured up to 100K

Mary and Joe Joint Account insured up to 200K ( 100K per person)

Total Insurance 400K

[Thorns]

Way too many points being argued in this thread. I think ppl have begun posting objections to points that haven't even been raised yet.

plz lock thread now.

Well that is why you need to be in multiple banks...

Also lets give this example, you and your wife can be insured up to 400K

How???

Two single accounts each in one of your names

Mary Single Account insured up to 100K

Joe Single Account insured up to 100K

Mary and Joe Joint Account insured up to 200K ( 100K per person)

Total Insurance 400K

A large number of ways. Fixed annuities are covered to 300k, so simply a retirement annuity and a checking account would fit the 400k bill.

[constant struggle]

Oh agreed, there are tons and tons of ways to get big limits...

I was just giving an example

[kunk75]

100 k in banks.

What happens when we need to bail out the FDIC where they cannot pay the 16 trillion in deposits if most major banks fail?

Also it is 100K per type of account

(Single, Joint, Retirement, the Revocable Trust Accounts)

Also Kunk you aint a balla? 100K in the bank is nothing if you were a true balla

[salaryman]

We don't know what Ford and GM would have done with one fewer competitors.........I guess my measure of success was the company's further existence, innovation, and ability to pay back the tax payer.

I agree with you that it in some ways the argument is mostly speculatory. We don't know for sure that allowing Chrysler to fail would have motivated Ford and GM to become more innovative. However, we do know that we bailed them out then, and we don't have much to show for it NOW. We basically delayed the inevitable....after a merger with German Daimler in 98, last year Daimler paid $650 million to a private equity firm that restructures "troubled" companies to get something like 80% of Chrysler off of its hands.

And we do know from historical example that investors probably could have taken productive parts of the company and potentially made something better out of them. (Look at Lehman, they were allowed to "fail" but other companies who could afford to bought pieces and some will probably make good money out of it.) This is how the system is supposed to work, companies that are too big or stop being productive stumble, break and then vultures come in and take what is worth anything and rebuild. Its unfortunate for the Lehman employees and the stock market takes a temporary hit, but its better for the overall health of the long term economy.

This is the problem with bailouts, they are quick fix solutions. Yes, saving Chrysler at the time worked out in the sense that the government could "pay back the taxpayer"...but the long term drain isn't worth the short term gain.

And I don't agree with your arguments that the bailout was a sucess for allowing Chrysler to continue to "exist and innovate."

First of all, it hasn't innovated or adapted to the the current market. Why didn't they create more fuel efficient cars when everyone knows crude oil is a limited natural resource that was getting more and more expensive? Why didn't they focus on producing a handful of well built cars to meet changing demand in the market instead of continuing to churn out a bloated product line until being essentially forced to reduce from 30 to 15 models February this year?

And, although its unfortunate that a large number of employees would lose their jobs if the company ceased to exist, if you follow that line of thinking the government should bail out every company that is going under just to prevent job loss. It doesn't make sense, survival of the fittest can't include throwing a life vest to big companies just because they're big, or just because they used to be winning the race. Let them drown, I guarantee someone will step in and take their place and you can bet they won't make the same mistakes.

[salaryman]

Thats got to be the most boring post I've ever made on sufu.

Let me go look for pictures to post in the corny white girl threak....

[please underestimate]

I agree with you that it in some ways the argument is mostly speculatory. We don't know for sure that allowing Chrysler to fail would have motivated Ford and GM to become more innovative. However, we do know that we bailed them out then, and we don't have much to show for it NOW. We basically delayed the inevitable....after a merger with German Daimler in 98, last year Daimler paid $650 million to a private equity firm that restructures "troubled" companies to get something like 80% of Chrysler off of its hands.

And we do know from historical example that investors probably could have taken productive parts of the company and potentially made something better out of them. (Look at Lehman, they were allowed to "fail" but other companies who could afford to bought pieces and some will probably make good money out of it.) This is how the system is supposed to work, companies that are too big or stop being productive stumble, break and then vultures come in and take what is worth anything and rebuild. Its unfortunate for the Lehman employees and the stock market takes a temporary hit, but its better for the overall health of the long term economy.

This is the problem with bailouts, they are quick fix solutions. Yes, saving Chrysler at the time worked out in the sense that the government could "pay back the taxpayer"...but the long term drain isn't worth the short term gain.

And I don't agree with your arguments that the bailout was a sucess for allowing Chrysler to continue to "exist and innovate."

First of all, it hasn't innovated or adapted to the the current market. Why didn't they create more fuel efficient cars when everyone knows crude oil is a limited natural resource that was getting more and more expensive? Why didn't they focus on producing a handful of well built cars to meet changing demand in the market instead of continuing to churn out a bloated product line until being essentially forced to reduce from 30 to 15 models February this year?

And, although its unfortunate that a large number of employees would lose their jobs if the company ceased to exist, if you follow that line of thinking the government should bail out every company that is going under just to prevent job loss. It doesn't make sense, survival of the fittest can't include throwing a life vest to big companies just because they're big, or just because they used to be winning the race. Let them drown, I guarantee someone will step in and take their place and you can bet they won't make the same mistakes.

my dad told me something similar if not the same thing this morning on the 20 minute drive to court.

longest 20 minutes of my life.

[salaryman]

alright son, and if you need to know why its taking you 8 dates, 2 steak dinners, and bag of thizz to get laid, come talk to me later, you got a lot to learn.

[Thorns]

Salaryman... I think you think I'm disagreeing with you. I'm not.

To make myself clearer... I was trying to come up with an example of a successful bail out IF bailouts were a good idea. And to be clear I don't think they are... which is why I'm not in favor of it now. However, in the very short-term (and I agree that in the long-term chrysler has proven itself a pretty shitty company) the gov't bailout did accomplish its goals. Whether or not it was a "good idea", or created the proper incentives, or was an efficient use of resources... I wasn't trying to argue.