I was surprised indeed that the U.S. House did not pass the bailout. I read today that after that happened, $1.2 trillion evaporated from the stock market. Personally, I can't make sense of it. The stock marketers don't get $700 billion of worthlessly inflating greenbacks, and $1.2 trillion disappears?
The House may eventually pass the bailout, but they'll pay for it come election time. What a juicy time for this crisis to happen. Apparently, American taxpayers are announcing their objections to raking us and our descendants over the coals. I feel like such a Republican being against the bailout!
I read that the bailout would enable banks to loan money again, for things like mortgages, business loans, student loans, etc. I honestly don't see the benefit in this. It seems like slowing down the pace of rapid-fire loans would be a good idea. I don't know who in this economy survives on credit, but it isn't me.
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And thinking too, when banks fail, the money is guaranteed by the FDIC. What is the risk of them failing, except those with over the maximum amount? It seems to me those are the people who are most likely to be able to stomach some losses. A lot easier than minimum wage workers, I would think.
I guess another risk is that the failed banks have created too much imaginary money, and they'll never be able to conjure it. Then the FDIC might not be able to insure the banks. America might have to do some thinking about its actions and the way it spends its money. Possibly things like war in every nation, including our own, may not continue to look like such a good thing to spend our money.
It does crack me up that this happens mere weeks before an election.
i'm guessing that the 1.2 trillion of lost value is relative to the stock market dropping X number of points. Every thousand points relating to a trillion dollars or whatever.
If you look around out there on the net, you'll find that although the bailout is failing, the fed has already provided more money than the bailout is worth, just last week. They averaged creating 188 billion dollars a day last week, grand total of 940 billion dollars.
I also just read they're getting ready to throw 630 billion out to the world markets this week.
p.s. martial law has been declared in the house.
I fail to understand, and (as a Republican) was previously for the bailout on the reasoning of "But I want there to BE banks when WE need a mortgage" and am rethinking that, based on the idea that perhaps this will all eventually sort itself out. And maybe people will quit borrowing more than they can actually pay back, which is the part of the problem that you never, ever read about in the news. Why IS there all this debt that's not being repaid? Could it be people living beyond their means, just possibly? But in a nation of victims, no one wants to take responsibility for their predicament. WE have a decent amount of credit card debt. And it may suck, interest and all, but we knew the interest rates when we got the cards. We're the ones who used the cards. And we can blame no one but our own foolish selves, and are working to fix what is entirely OUR problem. Not the government's problem, not the card company's problem, OUR problem.
Everybody bails on their credit, even the banks! But really, living within your means is a challenge, but nothing our parents or grandparents didn't do. My parents have rarely taken out loans, but always saved up money until they could afford something. There's no impulse buying that way, no risk of charging up a lot of credit card debt when you want something and have this little card that lets you have it immediately. We, as Americans, are in a position that we can have whatever we want, and have to use self control. It's hard!
Credit has inflated the price of things. Could you imagine buying a $200,000 house if you had to save up for it? No way! Even a cheap, like ours, $25,000 house would take forever to save up for. College tuitions too. Once credit becomes more limited, prices will retreat. They have to.
Caeseria, I imagine banks will still be giving out loans to young people who need housing. If not, some family help & a cheap repo house (apparently, you can find them here for a couple thousand dollars) might work out.
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