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  #1  
Old 09-29-2008, 11:27 PM
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Default Financial Credit Crisis - DOW Drops 777 Points

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Government seizes Fannie Mae and Freddie Mac. Lehman Brothers goes bankrupt. Banks everywhere are being forced to merge, and it doesn't seem to be getting any better. Meanwhile, today, the DOW fell 777 points today, higher than the drop experienced shortly after 9/11. Without a doubt, this is some pretty scary stuff.

Even though I don't actually own any stocks, I did have the displeasure of finding out both Wachovia's banking operations are now going to be owned by Citigroup, and Washington Mutual, who I've always enjoyed banking with, is now going to be owned by Chase. Not too crazy about that. With the kinds of CDs I have, I'm pretty glad those things are FDIC insured.

Seeing from what happened today, it seems like a lot of the drop in the DOW is because of Congress's rejection to buy up bad dept, and as soon as that was discovered, the DOW dropped at an extremely rapid pace. Today, only 162 stocks rose, while a massive 3,073 of them fell.

What are your views on this situation?
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  #2  
Old 09-29-2008, 11:34 PM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

I wish I had money. Today is the perfect day to invest in the stock market.
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  #3  
Old 09-29-2008, 11:54 PM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

I wish we invested in gold. Holy crap.
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Old 09-30-2008, 12:08 AM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

I blame Bush. You should, too.

Anyway, I hope we can get out of this, otherwise people will hate my birthday even more... and, obviously, the world will be broke and we will have to rely on barter or trading clamshells or something. :\

This relates to the housing market fall, though, so... how did that happen again?
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  #5  
Old 09-30-2008, 12:17 AM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

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Originally Posted by Hoshika View Post
I blame Bush. You should, too.

Anyway, I hope we can get out of this, otherwise people will hate my birthday even more... and, obviously, the world will be broke and we will have to rely on barter or trading clamshells or something. :\

This relates to the housing market fall, though, so... how did that happen again?
The rejection of the bill was actually Congress's decision, not Bush's. I admit Bush hasn't been that great of a president, but he's a scapegoat way more often than he should be...

As for the housing market, that's largely in part by banks giving loans and mortgages to people that never paid them back. Sure, those people lost their homes, but what the banks need is money in return, not houses they have no use for.
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Old 09-30-2008, 12:35 AM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

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Originally Posted by Neo Pikachu View Post
The rejection of the bill was actually Congress's decision, not Bush's. I admit Bush hasn't been that great of a president, but he's a scapegoat way more often than he should be...

As for the housing market, that's largely in part by banks giving loans and mortgages to people that never paid them back. Sure, those people lost their homes, but what the banks need is money in return, not houses they have no use for.
That's why Bush is always to blame. He caused the continents to seperate, and caused global warming and volcanoes to erupt. He is the sole reason why we don't have many records from Ancient Rome. He is also the reason why Latin is a dead language.

I've also realized that Congress rejected it, but Bush is president which makes him liable to be blamed for anything and everything. Including the reason why the next Zelda isn't out yet. :I

Eh, so this whole thing is just a circle of laziness... then, I say to America as a whole, that was really dumb. I wish there was a way to reset money. :\
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Haagen-Daz is an ice cream company, dumbass.

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Old 09-30-2008, 01:34 AM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

Actually speaking...using tax payers money to just bail out corporations is simply ridiculous. Oddly, Paulson started pushing for the deal right after his former company, Goldman Sachs, started falling into trouble. Congress did the right thing by rejecting the bill. The exchange would crash, but it would stabilize in a couple of months.

Also, Charter eleven of the Bankruptcy protection Act was, if I'm not mistaken, made keeping bankers in mind, not the American people.

And at the end of all this, Congress doesn't get to actually control the mortgages, if I'm not mistaken. According to the =url=http://financialservices.house.gov/essa/ayo08c04_xml.pdf]act[/url]...

(b) REPORT.—The Securities and Exchange Commission shall submit to Congress a report of such study before the end of the 90-day period beginning on the date of the enactment of this Act containing the findings and determinations of the Commission, including such administrative and legislative recommendations as the Commission determines appropriate.

So technically, Congress still doesn't have any control all over again even if they would have allowed the bail-out. Good thing that they rejected it. :D
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Old 09-30-2008, 03:44 PM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

But Japan did it, and apparently they succeeded. Meh. I don't know much. Now would be a great time to invest though.
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Old 09-30-2008, 05:26 PM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

I'm not surprised, honestly. The whole damn world has been falling apart for some time.
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Old 10-01-2008, 12:22 AM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

Quote:
Originally Posted by Hoshika View Post
I blame Bush. You should, too.

Anyway, I hope we can get out of this, otherwise people will hate my birthday even more... and, obviously, the world will be broke and we will have to rely on barter or trading clamshells or something. :\

This relates to the housing market fall, though, so... how did that happen again?
You couldn't be farther from the truth. Let me explain:

First of all, the whole reason this issue came abrupt was because of two main reasons. The Sub Prime lending was a huge hole in the economy. That is the prime reason that all of these houses are in foreclosure. People were offered rates that would adjust later in the amortization. Thinking that they could refinance due to an increased Real Estate market, they bought into the idea. Despite warnings from many people, they got sucked into it. After people who couldn't afford larger houses, nicer cars, and all that other stuff, were somehow now affording it, people began to ask how. Eventually Sub Prime lending spread extremely far. The idea of refinancing later was a huge risk, but they weren't told of the risks.

The second reason, is due to the fact that the banks were lending to people who weren't qualified. Back a couple years ago, if you had a pulse, you qualified for a loan.

This is the true reason that our economy is like this. It is the banks fault, not Bush's. Of course Bush probably could have stopped this, but how could he go against so many people who saw the chance at luxuries? Even billionaires were buying into the idea of Sub Prime lending.

So due to the fact that the Real Estate properties weren't going up, people were unable to refinance. Thus putting them into foreclosure. That is the reason we have so many foreclosures. After the first wave, Real Estate properties' values plummeted even further because Real Estate investors were now picking up properties from the Bank for cheap prices. Thus making the price of other properties seem just so astronomically high. This in a sense drove the prices down even more. Fast forward to a month ago, people were just defaulting on the loans and then buying a new property of the same square footage and everything. This allowed them to have the same size house, but at a lower loan amount/payment. So this once again is another ripple effect. Many more houses were put back into foreclosure.

During the past month, the government has required seasoning on a house before you can refinance a house. This inhibits the person from just running away from the house after they refinance. Banks have also made it harder to get a loan from them. (Which they should have done in the first place)

So in retrospect these properties are dirt cheap. How is the economy so bad when we can just pick these houses up so cheap? Our family buys Apartment Complexes, Strip Malls, Houses, Office Spaces, and Storage Units. Why would anyone miss this opportunity? Stocks are really a huge gamble. Of course you can make a lot of money, but you can also lose a lot of money fast. For instance, Warren Buffet lost 12 billion dollars due to his stock falling 30 percent I think. I would have to look it up, but point is, it is risky. With Real Estate prices as low as 40 grand a house, how can you beat that? The appraisals on these houses a couple years ago were 200 grand. That is a hell of a large spread. Not to mention we are making a net profit of 200 dollars per month per house. So we are making 160k per house plus monthly profits when the market turns. Not to shabby eh? The whole United States is in a buyers market phase 1. I'm not gonna get into a whole nother spectrum of economics, but lets just say it is a great time to buy. Buyers market phase 2 is when the market starts picking up, much of the supply is picked up and demand is starting to happen. Apartment complexes will be falling in price over the next year. So that is a great opportunity along with all of the other commercial aspects.

Point is, we made this mistake on our own. The problem will be solved, so why not capitalize on the misfortune to make yourself your own large fortune in the future?

Last edited by Limitless; 10-01-2008 at 12:26 AM.
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  #11  
Old 10-01-2008, 02:29 AM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

It appears as if John McCain got burnt badly by the Bailouts falling out in the House.

Hilarious.
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Old 10-01-2008, 04:59 AM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

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Point is, we made this mistake on our own. The problem will be solved, so why not capitalize on the misfortune to make yourself your own large fortune in the future?
Pretty much the idea of stupidity being rewarded by a bailout is at least shot down by Congress (thank goodness for that!). The problem with not being able to capitalize by buying is because simply few actually have the money to buy, so those that make money by buying are those that are (again) rich. It doesn't really solve anything in this regard outside of killing all of those pension funds, which again hurts the middle-class.
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Old 10-01-2008, 07:26 AM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

I heard the Wall Street Market resumed trading yesterday, don't know how it's all going though. Over here in Australia, well... Many families are going bankrupt as all their savings are in shares and they've completely lost them all. Share selling is probably through the roof, although the profit would be very low.

I'm really worried about this, no bank is safe right now, it's a possibility no-one has ever thought of. Everyone always just felt that the banks would be safe and now they're not. Australian stocks have just hit the floor. It's really bad. The Share Market always gets back on its feet, but now?

Thank you Trinity for explaining all that stuff. It's confusing. But yeah. It's a jumble, should we sell shares now? Or risk going bankrupt if it gets worse in the future? It's a real hard decision, one thing's for sure, I'm so bloody glad my family doesn't have a mortgage on this house...
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Last edited by Stormdancer94; 10-01-2008 at 07:32 AM.
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  #14  
Old 10-01-2008, 08:49 AM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

Quote:
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So in retrospect these properties are dirt cheap. How is the economy so bad when we can just pick these houses up so cheap?
It's bad because the banks gave say an amount 100,000$ for a mortgage, and as usual, the person probably defaulted, and the value of the house fell by 50% or more. The losses kind of stacked up to 2-3 Trillion Dollars, and they also have many assets that are going down. So if the banks crash, people who have their money in that lose it, and won't get it back.

But luckily, the Federal reserve, being a private bank; has autonomy from the Congress- they can do whatever they want without permission/overrule the Congress with their proposals, and are launching their own 700 Billion Dollar bailout. The only difference between the Congress's plan and the Fed's plan is while the Congress used tax payer's money, the Fed's just going to print it at their own discretion. Out of nothing obviously, and it can push inflation severely high. But I doubt they'd care, right?

Also, it might be a great time to buy, but no company's very safe till the Presidential elections are over, plus nobody has the money to take risks.
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Old 10-01-2008, 09:01 AM
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Default Re: Financial Credit Crisis - DOW Drops 777 Points

It's happening all over the world, it's a problem but not one thats not ever happened before.

Here in the uk there was a problems with the banks and if people decide to panik and take there money away from the banks they only make things worse.


The problems can be sorted out, but only if people hold back there greed and I am not refering to the banking issusse here, I am meaning over all.
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