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I don't think it was a thing of beauty. I don't think too many other people do either.
I think a volcano and a western Colorado blizzard are things of beauty, too. When viewed from a safe vantage point.
There's been more than ample warning over the last year for people to get clear of this train wreck. The vantage point people have now is the one they chose.
And the metal isn't done twisting yet. Recall how the talking heads on CNBC and their ilk called bottom after bottom as the NASDAQ sky-dived from over 5100 down to 1800 in 2000-2001?? Now the same talking heads are telling people to stay in again...that the markets will always go back up...even though today, over 7 years later, the NASDAQ closed below 2000 again, more than 60% off its highs in nominal terms, more like 80% down in real terms. If you had been all-in the market in Sept 1929, and "stayed the course," it would have taken until 1954 to get your money back. And if you were all-in at the beginning of 1966, it took until at least 1989 to recover (in real, inflation-adjusted terms). Those are forgotten lessons to be remembered, especially given that the street and the gov't are calling this the worse thing to happen in the markets since 1929. But you will not hear these words on Bubblevision. Just "buy!! buy!! buy!!" (And more recently "awsh*t!! awsh*t!! awsh*t!!")
What we need is to get off of the credit crack, not to steal $billions from the taxpayers to facilitate even more wild borrowing and spending, which will just ultimately lead to an even larger, maybe even cataclysmic replay of this same sort of market cliff dive.
Since Bush is intent on pushing us to socialism, I have some suggestions. We need to start taxing capital gains as income. Now. IRAs and 401ks already have tax protection for the gains made within that umbrella...the rest should be taxed just as ordinary income. There's no reason the preferred earning vehicle of the wealthy (and especially the obscenely wealthy pigmen) should be taxed at a lower rate than what productive americans earn in their paychecks. And we need to ramp the tax rates way up at high income levels--90% at the $250,000/yr threshold seems fair, given these people are the ones who pillaged the economy through their investments in the hedge funds and heavily leveraged IBs that are collapsing right down around our ears.
We have pooped on our dinner plates...the solution is not to have the government steal our money to buy us ex-lax so we can put even more of the wrong stuff on our plates.
"Debt is dumb."
Last edited by Bob from down south; 09-29-2008 at 05:36 PM..
Today will be remembered as a dark day in US economic history--but NOT because Congress refused to commit $700 billion in taxpayer money to the "mortgage bailout." It will be remembered as a dark day because it was the moment that a couple of decades of speculation in the real estate markets got exposed for exactly what it was--a Ponzi-type scheme almost identical to the margin-buying stock pyramid schemes that led to the 1929 stock market crash and the ensuing Great Depression. The only real difference is that this scheme used real estate as a vehicle and millions of Americans got caught up in the speculative fervor with their shelter at risk. In that respect, the fallout will likely be even worse than the Great Depression.
The nearly 800 point loss on the Dow today was the tacit recognition of the markets that the rampant speculation in real estate finally created a bubble big enough that the not even the Federal government of the United States--and probably not God Almighty--was big enough to keep inflated. Americans are getting a big, ugly lesson (as they did in the aftermath of 1929) in the difference between "paper wealth" and real wealth. They are going to also get a big, ugly lesson in the difference between blowing money on expensive non-productive crap (like big houses, mountain condos, trendy stocks, fancy cars, lavish vacations, etc., etc.) and prudently investing in productive enterprises that actually create real wealth.
As for Colorado, well, when the dividend and investment checks to all of those retirees who plopped down here get cut in half or worse, when nobody wants to build anything (and can't get financing for it even if they did), and prospective tourists are a hell of a lot more worried about affording corn flakes than a ski vacation--just how well does anyone think the real estate/construction/retirement/tourist-dominated economy of this state is going to fare? Oh, and if the slackening economy cuts energy demand significantly (and all indications are it will)--well, so much for that segment of the Colorado economy propping up the rest of the state.
I think it is an absolute tragedy that this country and this state are about to get such a viciously harsh lesson about the evils of non-productive speculation, but that is what we have collectively willed ourselves to get. We convinced ourselves that there really could be a "free lunch," but it just isn't so.
Big market down days certainly don't help to bolster consumer confiedence - something that if lost will eventually hurt us. Nevertheless today's 777 loss will be forgotten in a few weeks after the "rescue" bill gets passed and the markets bounce back.
Honestly there are some folks posting here who sound stark raving mad. "Grab your guns, load the pickup with provisions and head for the hills". This relentless drumbeat for some sort of a catastrophe is tiring. There is plenty wrong in our country to fault. But I haven't found a better one. Have you?
Honestly there are some folks posting here who sound stark raving mad. "Grab your guns, load the pickup with provisions and head for the hills". This relentless drumbeat for some sort of a catastrophe is tiring. There is plenty wrong in our country to fault. But I haven't found a better one. Have you?
I have not and do not advocate the "grab your guns" philosophy. In fact, I think the Great Depression contained a poignant lesson that getting through difficult times means working together with neighbors and communities to make the most of scarce money and resources. If that sense of community can be rekindled in this country, we just might look back on these coming difficult times as the sort of challenge that rekindled our spirit as a country. If, though, we collectively continue to behave as materially spoiled brats concerned only about ourselves--as far too many have in the last decade or two--well, then, we are in big trouble, not just economically, but socially as well.
Big market down days certainly don't help to bolster consumer confiedence - something that if lost will eventually hurt us. Nevertheless today's 777 loss will be forgotten in a few weeks after the "rescue" bill gets passed and the markets bounce back.
Consumer confidence is a moot point if the consumer is broke and can't continue to borrow (burrow?) himself further into a deep, deep hole. Prairie dog economics, if you will.
Quote:
Originally Posted by cobmw
Honestly there are some folks posting here who sound stark raving mad. "Grab your guns, load the pickup with provisions and head for the hills". This relentless drumbeat for some sort of a catastrophe is tiring. There is plenty wrong in our country to fault. But I haven't found a better one. Have you?
That tired old "love it or leave it" mantra won't work. We have to love it enough to change if we are to survive as a nation. The stark consequences of years of living beyond our means and our resources are upon us. And this insane "no banker left behind" bailout plan had no chance of changing that. BTW, it's worth noting that in the hours before the bailout vote, the fed announced it was more than doubling its currency swaps to inject a whopping $630 billion of liquidity through its "temporary" lending facilities in an emergency measure...an amount almost as big as the proposed bailout itself, and it barely registered above the noise level. So $700B would likely not have done squat-all to help anyway. There literally is not enough money in the treasury to buy our way out of the major correction that must occur to get asset values in line with actual national production.
I think it is naive in the extreme to think that today, and more days like it soon to come, will be forgotten, any more than Oct 1987 or Oct 1929 have been long forgotten.
Last edited by Bob from down south; 09-29-2008 at 09:28 PM..
Reason: My laptop can't spell!!
Today's Congressional bailout slapdown and 777 point Dow implosion was a thing of beauty.
It was pretty ugly form my perspective, because I take no joy when people lose money, even the idiots & SOBs who deserve it.
jazzlover wrote:
I think the Great Depression contained a poignant lesson that getting through difficult times means working together with neighbors and communities to make the most of scarce money and resources.
Things are really bad, even congress is showing some superficial signs of working together.
cobmw wrote:
There is plenty wrong in our country to fault. But I haven't found a better one. Have you?
Actually I have ( Canada ), and I'd be living there if the immigration process wasn't so discriminatory against Americans of limited means over the age of 55.
Today's Congressional bailout slapdown and 777 point Dow implosion was a thing of beauty.
It was pretty ugly form my perspective, because I take no joy when people lose money, even the idiots & SOBs who deserve it.
Well, the joy isn't in seeing people lose money (although the sight of people losing fictional and illusory equity wealth is not at all the same as seeing them losing actual money). The joy is seeing things headed back to sane and sustainable levels. I don't care much if the unwise get steamrolled in the process...I have always seen the propagation of the illusion that you can get something for nothing (just by trading securities back and forth) as quite dangerous, and it went on for so long that millions of people really know no other paradigm. The adjustment process is going to be especially brutal for them. As an old John Wayne poster says: "Life's tough...it's even tougher if you're stupid."
The Bush administration tried to pull a fast one...they told us the world economy would be a veritable Chernobyl by yesterday if they didn't get their way, and tried to force the Congress to give $700,000 times a million dollars that haven't even been earned yet to the same greedy bankers that did this in the first place. And it would have solved nothing...by the time the greedy pigmen showed back up demanding more, the Bush gang would have been in their last month or two in office.
Noriel Roubini, an economist I respect, has a list of actions the gov't could take that would not involve just giving our money to corrupt bankers. Like injection of preferred shares into failing companies, which dilutes the current stockholders and puts the US taxpayer in a superior position when it comes time to take profits in the future. Way better than the half-assed warrant proposal that got added in the 13th hour.
The gov't does need to act, but not by buying bad paper way above market prices (the only way the Paulson plan could have worked), or by committing nearly a trillion dollars to an inept administration that's leaving in a few months that, frankly, couldn't find daylight with a flashlight right now.
BTW, the sun still rose this morning. No mushroom clouds on the horizon. Clouds, yes, but no nucular (sic) meltdown from not meeting the extortioners' deadline put in front of us a week ago.
I'm going to be a good Coloradoan and go fly fishing today. Maybe the trout will just throw themselves at my flies after seeing their 401k balances this morning...
I'm going to be a good Coloradoan and go fly fishing today.
Even though you and congress will both be involved with some fishy business today, I'll wager that you'll get alot more done than congress will.
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