2008-09-23, 20:37 | Link #83 | |
Bittersweet Distractor
Join Date: Nov 2007
Age: 32
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In response to the videos Karasuma posted up... It kind of bothers me that I am not really able to understand the second video. Unless someone is knowledgeable in both finances and economics, it is hard to know if certain plans are reliable or not. I can't understand very much from the solution video and neither can average American folks I would bet as well. As far as the average American knows, the banks gave out loans they shouldn't of to people who were not capable of paying them off. Now the financial institutions got bit in the ass and the whole public suffers for their greed. Yeah, it is not diffcult to understand the very basics of the situation, but even then the problem is a lot more complicated and can be traced down to may different roots. However, the big problem is that a majority of people do not have the knowledge to know how to fix it. People are going to go into a 2008 election not knowing anything about our economy really and then are going to end up voting for the person they trust more on the economy (Which more often than not depends on how much a person bull shits the public about our situation with statements like "I'll get the money back into the taxpayers hands with this plan I just pulled out of my ass!" It bothers me how naive and ignorant the masses in America are with our current situation. The government kept us so much in the dark, even spouting out how the banks were sound weeks before this crises, to the point that a lot of people did not see this coming (My family knew it was coming since a year and a half ago). Now the public is still in the dark regarding what is actually the best solution for this and how bad our situation really is. Just one of the flaws with our half-assed democracy in this country, there is not equal access to information that is very important to us. Same reason we got in the Iraq war, the same reason this crap is happening under many people's noses.
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2008-09-23, 21:22 | Link #84 | |
Senior Member
Join Date: Apr 2006
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Short answer you have $10 only and there are 10 friends like you. I, for some reason, am able to borrow $10 from you each and promise to give you interest. After a while, I say I spent all the money and can't give you neither the interest or principle. Aka, I declare bankrupt. Since you don't get your money back, you and your friends also go bankrupt. If you and your friends also borrow your $10 bucks to start with, your lender also go bankrupt. This is sorta how credit crunch work. So, government comes in and say to me. You bad boy, I am going to take all your money ( which I don't have ) and honor my debt so that you and 10 others will get your money back and stop the chain reaction. This is a mini explanation of bailout. However, government's money comes from taxation. Taking on extra loan require money to come from somewhere. Hence, government will raise tax or increase their deficit. Your brother, meanwhile, didn't do a thing wrong and his tax suddenly is going up. Hence, he is not happy. Me, you and 10 other friends are wallstreet. Your brother is mainstreet. Reality is more complicated but that is basically what happens right now. If you are with me so far, I can explain more.. Last edited by karasuma; 2008-09-23 at 21:34. |
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2008-09-23, 21:27 | Link #85 | ||||
Senior Member
Join Date: Dec 2005
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Even worse, it's a very complicated problem, and it has lots of red herring tangents so it's not easy to figure out the solution. So it's sort of natural that the politicians put their faith in the people who they have in place to address this kind of crisis: Paulson and Bernanke in particular. The problem here is that they were also responsible for getting the financial system into this mess to begin with; and that their proposed plan doesn't seem to do anything to actually fix it. And all that despite threatening to empty the taxpayers' coffers. Quote:
I'm far from being all that knowledgeable about finances, but I'll try to summarize the three points in that video: 1. Everyone must list their assets, and give instructions as to how they valued those assets. 2. Everyone must make contracts based on what they own. 3. All leveraging is capped at a 12:1 ratio. None of these problems have anything to do with mortgages per se. Instead, they mostly address what financial institutions further do with the mortgages in order to make more money. Quote:
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2008-09-23, 21:39 | Link #86 |
Senior Member
Join Date: Apr 2006
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I LONG support that financial education should be studied in HS. People ought to know how credit card works, how money created and how mortgage works.
Like it or not, you will touch these stuff when you grow up and people will take advantage of you if you don't know what they are. Here is a good question : What is money? Part 1 of 5 |
2008-09-23, 22:37 | Link #87 | ||
(ノಠ益ಠ)ノ彡┻━┻
Moderator
Join Date: Mar 2006
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He couldn't answer on the process of hierarchy and how the plan would be regulated. He couldn't answer plans beyond reverse auctions on how to resell the bad debt. He quickly said yes to bailing out foreign investment institutions who have stakes in US banks but had no answer as to why the plan had no provisions for covering home owners that are on the verge of or in foreclosure, which would further hurt home values and banking systems. The request is too much money and power granted for a man who can't sit in front of a congressional panel and explain very clearly *what* he wants to do beyond stating that it's broad and important. We get that. Now explain the specifics, the why's and hows. It's why we're holding this panel, right? Quote:
The problem is that the economy has changed a lot since my education 15 years ago. The average American has about the same grasp on the system as I do, maybe a little worse. We didn't all go to college to continue such studies so we're relatively uneducated on the complexities and changes of the system as it has become today. This is why we're struggling to understand what all of this means.
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2008-09-23, 22:49 | Link #88 |
9wiki
Scanlator
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Ben Stein offers some different perspective on the march into this mess.
http://finance.yahoo.com/expert/arti...DeCl.2G0S7YWsA
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2008-09-23, 23:30 | Link #89 |
Obey the Darkly Cute ...
Author
Join Date: Dec 2005
Location: On the whole, I'd rather be in Kyoto ...
Age: 66
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God.. Ben Stein.... even when I fervently disagree with him, I find myself smiling at the injection of humor he puts in it.
Flashback to Animaniacs and a certain party-goer voiced by Ben that discussed cheese puffs and Bob Barker.....
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Last edited by Vexx; 2008-09-24 at 01:03. |
2008-09-23, 23:57 | Link #90 | |
Senior Member
Join Date: Apr 2006
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Basic problem we have right now is Katrina hits and all insurance companies go belly up. They like to use fancy name like CDS, CDO and all the alphabet soup to go with it because they don't want people to understand it!! Like mutual fund and 401k, how many mutual funds beat the index? Why your 401k plan only have a few fund selection. Do you know how those fund get on the exclusive list that you can choose from your 401k? At the minimum, we should understand all financial tools that we use everyday and avoid those that we don't understand. |
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2008-09-24, 01:13 | Link #92 | |
Senior Member
Join Date: Dec 2005
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Actually, the title was bugging me, so I changed it when I first posted.
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2008-09-24, 01:24 | Link #94 |
Senior Member
Join Date: Apr 2007
Location: East Cupcake
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^ the original title was "Economical Crisis of 2008."
As to your on-topic point, yes, the current era of pure investment banking is going to have a sharp decline. One "good" war will correct all of the economical problems... |
2008-09-24, 01:27 | Link #95 | |
神聖カルル帝国の 皇帝
Join Date: Jul 2007
Location: Korea
Age: 37
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This Economic Crisis has been good for my bank account. |
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2008-09-24, 02:35 | Link #99 |
神聖カルル帝国の 皇帝
Join Date: Jul 2007
Location: Korea
Age: 37
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Natural resources are very good if you can tell how the prices goes. They're one of the mose volatile, but also one of the most solid investments.
Wheat, rice, uranium, gold...... so many precious resources, so little cash to invest. |
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economy |
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