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After a tense weekend that raised further doubt about the strength of the U.S. mortgage market, the stock market drew some reassurance from news that the Treasury and Federal Reserve stood ready to come to the rescue of mortgage finance giants Freddie Mac and Fannie Mae.
But, despite a relatively mild Monday selloff, there was no question that a bear market is well underway, the latest sign that the economy is probably in recession. If history is any guide, both the economy and the stock market have a way to go before they hit bottom.
Stock prices have been near bear-market levels for weeks but officially landed there last week when the broad Standard and Poor's 500 index fell to more than 20 percent below its October peak level. The more narrow Dow Jones industrial average already had fallen more than 20 percent from its latest peak, the standard definition of a bear market.
Bear markets and recessions often go together. When companies see bad weather ahead and mark down their profit forecasts, investors take cover and sell stocks.
But the relationship is not perfect. The market has seen big pullbacks before without the economy tipping into recession; the Crash of 1987 is one of the best recent examples. Conversely, in the back-to-back recessions of 1980-82, one of the worst downturns of the past 50 years, the S&P 500 index was actually higher at the end of the event than when it began.
Over the past hundred years, the average bear market has lasted a little over a year and seen stock prices fall by about 30 percent. By that measure alone, investors can expect stock prices to continue to continue falling.
Corporate profits, meanwhile, are coming under pressure. And because stock prices generally are heavily influenced by corporate earnings, the bear market isn’t likely to end before those profits begin to recover.
That’s why, over the next few weeks, investors will be looking carefully at not only at what companies report they earned in the second quarter, but the guidance they give for the next few quarters. Those forecasts have been getting progressively worse so far this year.
“When we started the year, we thought we would see about a 4 percent increase in earnings for the S&P 500 in the second quarter,” said Sam Stovall, chief investment strategist for Standard and Poor's Equity Research. “Now based on new guidance, additional writedowns and so forth we're looking for closer to a 10 percent decline.”
A lot, of course, depends on how well or poorly the economy performs. Though the latest data show the GDP has turned in small gains in growth, a series of six months of job losses and a five-month decline in industrial production point to an economy that is shrinking.
Merrill Lynch economist David Rosenberg is among those who believe that a recession is already under way.
Although the nation's gross domestic product rose 1 percent in the first quarter, according to the government, Rosenberg said in a recent report that he expects that figure to “undergo massive revisions.” When the final numbers are tallied, the results could show the economy began shrinking late last year. Such revisions marked the beginnings of both the 2001 and 1990-91 recessions, said Rosenberg.
Even as economic growth appears to have stalled, higher prices for oil, food and other commodities are fueling higher inflation both in the United States and around the world. That’s forced the Federal Reserve to halt a series of interest rate cuts deigned to keep the economy moving. Central bankers in Europe and elsewhere already have begun raising rates in an effort to curb inflation.
“Stagflation is the word — certainly here in the United States — and it's more or less breaking out all over the world,” said Allen Sinai, chief economist at Decision Economics, referring to the dreaded combination of stagnation and inflation.
“And it's putting central banks in a real bind," he said. "For (economic) growth they need to cut rates, but they can’t possible do that. At the end of the day, central banks have to raise rates to fight inflation.”
Fed officials will get another reading on prices this week, with back-to-back reports on the latest monthly data on wholesale and consumer inflation. That news could place the Fed further in a bind; a reading showing rising inflation would increase the need to raise interest rates to try to tamp down price increases.
But raising rates could worsen the ongoing global credit crisis — including the fragile condition of mortgage finance giants Fannie Mae and Freddie Mac. On the other hand, lowering rates to calm the credit markets risks stoking inflation.
As the latest round of corporate earnings reports are released in the next few weeks, investors are bracing for more bad news as financial giants like Merrill Lynch and Citigroup Inc. are again expected to write off billions of dollars of assets. Since last year, banks have written down nearly $300 billion.
“We have to consolidate, recapitalize and resize the entire financial system,” said Sinai. “It is broken, it is cracked. It will take a long time to fix it. You overlay that on what's going on in the economy, and the recession that we are already in and have been in, and the equity bear market is just going to last with occasional interruptions.”
As they work to rebuild damaged assets, banks are also coping with a big drop in profits. Financial stocks in the S&P 500 last year generated $61 billion of earnings; this year, the number is fall below $25 billion, according to S&P.
With a sizable portion of their assets backed by home mortgages, the continuing decline in home prices will prolong the rebuilding process. And with banks under pressure, they’re lending less money to potential home buyers — which further delays the recovery in the housing market.
"You're going to have further price drop as the value of (banks’) collateral is impaired and the mortgages are held on the banks balance sheets will become worthless," said Kevin Caron a market strategist at Stifel Nicolaus. "So it's a self-propagating negative cycle that is going to be difficult to break, but eventually it will come to an end."
Earlier this year, the hope was that aggressive rate cutting by the Fed, coupled with $107 billion in tax rebate checks, would help the economy dodge a recession. The stimulus plan seemed to have the desired effect. Last week retailers reported better-than-expected gains in sales for June.
But the final checks have been mailed and will soon be spent. Then higher prices and rising unemployment are likely to crimp consumer spending, which accounts for some 70 percent of U.S. economic activity.
“Discretionary spending of all kinds — restaurants, movies etc. — are going to get scaled way back in the next six months to a year,” said Nariman Behravesh, chief economist at Global Insight. “And that will have a dramatic effect on consumer spending and the overall economy.”
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 | Consumer prices jump 1.1 percent in June | Associated Press | Wed Jul 9 | 3 |
| Stock futures head to higher open | Associated Press | Wed Jul 16 | 0 |
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5.1
1.1
{"commentId":2188582,"authorDomain":"chamie1"}
We can't really trust anything the government is telling us. If Bush will lie to go to war then he will lie to make the economy look better than it is to try to get McCain elected. After all, according to his financial advisors this is just a "mental recession" and we're all just imagining higher gas prices and losses in the value of our homes, retirement, savings and pockets.
{"commentId":2188582,"threadId":"312773","contentId":"1664179","authorDomain":"chamie1"}
- 1 vote
#1 - Mon Jul 14, 2008 2:45 PM EDT{"commentId":2300587,"authorDomain":"ccmc43"}
The housing bill that just passed means that the taxpayers will bail out Fannie & Freddie if they buy more bad paper from investors. We the people must prevail upon lawmakers make to those two entities taxpayer owned. The housing crisis is not even close to its bottom, regardless of what MSM wants us to believe. The slimy mortgage brokers who hoodwinked unsophisticated millions into sub-prime loans passed on a lot more bad paper to investors, who will want to unload it on Fannie & Freddie any time now. Bush is signing the bill to bail out his cronies, not to help homeowners! If those are taxpayer owned (or government owned) entities, they will not be able to do it.
{"commentId":2300587,"threadId":"312773","contentId":"1664179","authorDomain":"ccmc43"}
- 2 votes
{"commentId":2305487,"authorDomain":"knh"}
The name of this game. You got it exactly right. Take away responsibility so that those who emptied the pot get it filled up again because if not, worse things will happen to the economy. We used to call that putting good money after bad. Now it's called propping up the economy.
{"commentId":2305487,"threadId":"312773","contentId":"1664179","authorDomain":"knh"}
- 2 votes
{"commentId":2993066,"authorDomain":"gbanerjee2"}
Lying your way out this mess will be a little difficult. The (near)bankruptcies of these institutions is for all to see.
Regulation now, regulation tomorrow, regulation forever!! Let's criminalize greed and stupidity.
{"commentId":2993066,"threadId":"312773","contentId":"1664179","authorDomain":"gbanerjee2"}
- 2 votes
{"commentId":2191729,"authorDomain":"SgtBob"}
The 800# Gorilla in the room is oil/energy. There is no market process that isn't energy vulnerable, and they have run the table.
{"commentId":2191729,"threadId":"312773","contentId":"1664179","authorDomain":"SgtBob"}
#2 - Mon Jul 14, 2008 6:24 PM EDT{"commentId":2191974,"authorDomain":"dyssie"}
After the market crash in 1929, the "Uptick Rule" was created to keep short sellers from causing another market crash. That rule was in effect until July 2007, when the SEC decided to abolish the rule.
Since that rule has been abolished, short sellers can force a stock down en masse without having to wait for the price to recover, which was what the old rule to prevent.
With a dimwitted President, a clueless Fed chief and an SEC that is friendly to hedge funds, the stock market is headed for the worst disaster since the Great Depression and leadership is too incompetent to fix it.
My advice is to sell all your equities, bury your cash in a mattress and when the market crashes so hard that the world appears to be ending, also called "Capitulation Day", that is the time to put your money to work.
This is the game plan. Do you have the discipline to follow it?
{"commentId":2191974,"threadId":"312773","contentId":"1664179","authorDomain":"dyssie"}
#3 - Mon Jul 14, 2008 6:56 PM EDT{"commentId":2191977,"authorDomain":"dyssie"}
After the market crash in 1929, the "Uptick Rule" was created to keep short sellers from causing another market crash. That rule was in effect until July 2007, when the SEC decided to abolish the rule.
Since that rule has been abolished, short sellers can force a stock down en masse without having to wait for the price to recover, which was what the old rule was created to prevent.
With a dimwitted President, a clueless Fed chief and an SEC that is friendly to hedge funds, the stock market is headed for the worst disaster since the Great Depression and leadership is too incompetent to fix it.
My advice is to sell all your equities, bury your cash in a mattress and when the market crashes so hard that the world appears to be ending, also called "Capitulation Day", that is the time to put your money to work.
This is the game plan. Do you have the discipline to follow it?
{"commentId":2191977,"threadId":"312773","contentId":"1664179","authorDomain":"dyssie"}
- 5 votes
#4 - Mon Jul 14, 2008 6:57 PM EDT{"commentId":2276121,"authorDomain":"craig38w"}
I hate to say this, but I agree with everything you have said, I hope we are both wrong.
{"commentId":2276121,"threadId":"312773","contentId":"1664179","authorDomain":"craig38w"}
- 1 vote
{"commentId":2975699,"authorDomain":"ynotville"}
An old sage told me back in the mid-seventies to invest in gold. Sure wish I had taken his advice. It's probably not too late now.
{"commentId":2975699,"threadId":"312773","contentId":"1664179","authorDomain":"ynotville"}
- 3 votes
{"commentId":2977975,"authorDomain":"indebted"}
Then my advice is to keep it your bank, not theirs. Under your insurance, not theirs. And may fortune favor you, MULLITHDZ.
{"commentId":2977975,"threadId":"312773","contentId":"1664179","authorDomain":"indebted"}
- 1 vote
{"commentId":2978410,"authorDomain":"blakenorrish"}
Unfortunately I don't think you understand the concept of short selling, or price determination. Shorts cause a stock's price to fall, yes, just as longs cause a stock's price to rise. However, they can't push the stocks value permanently below its perceived market value. The lower they push a stock price, the more current longs are willing to sell to them at that price. Just like the higher the longs push a stock price, the more people would be will to sell at that price. The market naturally corrects.
Do not blame shorts for the demise of Lehman or others. If Lehman was really worth anything, some other company would have found it profitable to buy. Because nobody did, it proves that Lehman the company, and thus Lehman the stock, actually was worth very, very little.
{"commentId":2978410,"threadId":"312773","contentId":"1664179","authorDomain":"blakenorrish"}
- 1 vote
{"commentId":2978473,"authorDomain":"blakenorrish"}
Should have read: "the more current longs are willing to BUY FROM them at that price"
{"commentId":2978473,"threadId":"312773","contentId":"1664179","authorDomain":"blakenorrish"}
- 1 vote
{"commentId":3060116,"authorDomain":"hsp"}
AND - PRIZE GOES TO THE HAMMSTER FOR GETTING IT RIGHT, except that stuffing your mattress with Dollars ain't a good bet. Keep some Dollars. Buy some Euros. Some Yuan. Some Yen. Then stuff THOSE in the mattress. Some will rise. Some will fall. It will balance out. AND, if you can do so reasonably, buy gold, silver, platinum for personal possession and commodities certificates in precious and semi-precious metals (copper, nickel, etc.) for investment purposes. The market will shake out because it has to, however, before that happens, we may need a wheelbarrow to haul the cash to buy ourselves a beer, so hunker down. And, ya' know, a vegetable garden couldn't hurt.
Our grandparents dealt with this. We can too, but we can't deal with it by clinging to the economic assumptions of the past three or four decades. America's been on a buying and spending spree since the Second World War. Just like credit cards, the bill eventually comes due.
{"commentId":3060116,"threadId":"312773","contentId":"1664179","authorDomain":"hsp"}
- 1 vote
{"commentId":3340296,"authorDomain":"madgeroger"}
and the bad guys will take your mattress and bury you!!!!! the market thrives on the misfortunes of people and governments. all you mattress stuffers better lock your doors!
{"commentId":3340296,"threadId":"312773","contentId":"1664179","authorDomain":"madgeroger"}
{"commentId":2192048,"authorDomain":"mibrooks"}
Good. There has been a total disconnect between Wall Street and Main Street for too long. These days, the more money these investors get the more jobs are outsourced, the more guest workers are brought in to displace American workers. I figure, if we really try, we can bankrupt the lot of them, put them out of work, allow them to loot or otherwise lat waste to the public employee retirement accounts they manage, so that those self serving public servants are in the same boat as the rest of us (where our 401K were long ago looted and swindled away). Then, maybe we can have some sanity and equity here, where the citizens actually watch out for each others interests, where investors have some thought for "community". Either that, or we simply enforce the laws pertaining to their criminal actions kill them. As far as this reader is concerned, instead of "reality television", I would much rather watch some squirming investor, like an oil commodity broker, be tied down to a prison gurney, have tubes inserted into their veins, and watch them die.
{"commentId":2192048,"threadId":"312773","contentId":"1664179","authorDomain":"mibrooks"}
- 1 vote
#5 - Mon Jul 14, 2008 7:04 PM EDT{"commentId":2192276,"authorDomain":"awalsh8174-1"}
The government and the Wall Street pundits have been lying all along about the state of the economy. All the major financial houses are bankrput from the mortgage mess, and are only being kept afloat by Fed loans. The value of those mortgage-based investments has recently been estimated at 50 cents on the dollar (one can't be sure what they're really worth because the financial houses keep the data secret). That means there's hundreds of billions in losses yet to be recognized and written off. The Fed has no choice but to keep pumping out dollars, which just drives inflation higher. We're far from seeing an end to this mess, and the American citizenry is paying a heavy price. I suspect the government will try some tax-based bailout; which will be very painful. It will come after the Presidential election. No one wants to talk about it now.
{"commentId":2192276,"threadId":"312773","contentId":"1664179","authorDomain":"awalsh8174-1"}
#6 - Mon Jul 14, 2008 7:35 PM EDT{"commentId":2192304,"authorDomain":"hnatgj"}
Golly gee, look what happens when you spend more than you have.
{"commentId":2192304,"threadId":"312773","contentId":"1664179","authorDomain":"hnatgj"}
- 2 votes
#7 - Mon Jul 14, 2008 7:38 PM EDT{"commentId":2978385,"authorDomain":"debh-1"}
Yep, I think the ONLY good thing that may come out of this whole mess is that a lot of people are going to learn that they can't live on credit and keep spending more than they earn.
{"commentId":2978385,"threadId":"312773","contentId":"1664179","authorDomain":"debh-1"}
- 1 vote
{"commentId":2988254,"authorDomain":"gregziglar"}
What we will learn is that we can still live way above our means and the government will bail us out.
The government is trying to fix things TODAY, and is therefore borrowing MORE money that they don't have.
So, again, lessons learned, if I just charge more and more and more and get more credit cards and charge more, all will still be okay TODAY.
That is what the government is telling us.
{"commentId":2988254,"threadId":"312773","contentId":"1664179","authorDomain":"gregziglar"}
- 1 vote
{"commentId":2192506,"authorDomain":"shearwaters"}
Without a doubt, the US is in deep financial trouble. The recent buyout of Bud, our national beer, to InBev of Belgium is just the tip of the garage sale of US assets. Soon, the dollar will be so cheap that Russia, China, Saudi Arabia and Japan will jump on the left overs. Just check out the website www.economyincrisis.org for the list of foreign acquistions of US companies. Pretty impressive.
{"commentId":2192506,"threadId":"312773","contentId":"1664179","authorDomain":"shearwaters"}
- 1 vote
#8 - Mon Jul 14, 2008 8:04 PM EDT{"commentId":2405253,"authorDomain":"master-o-chi"}
Its OK, rocky - you keep buying your franks and beans at Walmart, its not your fault Americans have no jobs anymore. As for Bud, now you can claim that you are rich enough to buy that fancy imported beer.
I hear the Republicans have their money in Euro stocks and Chinese industry... anything to say to them about that?
{"commentId":2405253,"threadId":"312773","contentId":"1664179","authorDomain":"master-o-chi"}
- 3 votes
{"commentId":2976066,"authorDomain":"ynotville"}
Even more impressive is the amount of real estate owned by foreigners. The amount, in acreage, is becoming more & more disproportionate. Do you think all the huge corporate farms, ranches & mega dairies are owned by Americans? What about the high-rise buildings in our major cities? One Euro buys a lot more than one dollar, and suitcases full of cash, U.S. dollars, enter our country every day from across the pond.
Wake Up! Be informed, register & vote using your best judgment, no matter which party you choose. If we fall into a chasm, we fall together, as Americans. It kind of makes sense to volunteer for voter registration drives. Obviously, there are more citizens than there are politicians. And don't be embarassed to ask your co-workers the question of the year. "Did you vote?"
{"commentId":2976066,"threadId":"312773","contentId":"1664179","authorDomain":"ynotville"}
{"commentId":2989402,"authorDomain":"hestia-m"}
Mullithdz, I agree that it's troubling the amount of real estate in the US that is owned by foreigners. But we cannot blame this on anyone but ourselves. The US imports trillions in Arab oil, Chinese electronics, Korean cars, Chilean produce, etc, etc, etc. The US exports very few products, but the cash flows have to balance somehow. Foreigners buy T-bills, real estate, and US stocks. We are selling off our country in order to continue our consumerist ways. Eventually, when there is nothing left to sell, the dollar will crash. This is not rocket science.
{"commentId":2989402,"threadId":"312773","contentId":"1664179","authorDomain":"hestia-m"}
{"commentId":2197423,"authorDomain":"unaprec8d"}
Sadly, the world is not being run by those privy to The Mandate of Heaven and the reality that transcends man's concepts of time.
The money elites and the establishment have allowed the tail to wag the dog again but, as this is unnatural, the system will fail greatly and will not be resurrected this time with a New Deal.
Money within 2 years will be worthless and stocks and bonds will have no meaning just as they do in most nations around the world unlike North America or Europe.
Welcome to the beginning of the end of civilization and the rise of the Mandate of Heaven and the reality the has always transcended man's concepts.
The world has always been round yet for eons mankind thought the world flat. Just as that era was abolished so will this money based civilization.
Money is unnatural just as Jesus Christ stipulated thousands of years ago but yet mankind clings to its and civilization based on this abnormal power.
Good Luck and read my blogs at or Myspace - Fighter for Lost Causes.
{"commentId":2197423,"threadId":"312773","contentId":"1664179","authorDomain":"unaprec8d"}
#9 - Tue Jul 15, 2008 1:38 PM EDT{"commentId":2975576,"authorDomain":"schwannomin"}
Wow! Some bank issues really bring out the lunatics. But, please be my friend on myspace. I want to see what kind of loon you are.
{"commentId":2975576,"threadId":"312773","contentId":"1664179","authorDomain":"schwannomin"}
{"commentId":2976345,"authorDomain":"ynotville"}
AMEN brother!!! I guess that means you know more about the economy than say... John McBrain? I don't use myspace, & I do not want to be your friend. I have read the Bible, my dad was a Methodist minister. Then I read The Constitution of The United States of America. Somewhere there was the mention of church & state. We live in a democratic republic with a capitalistic system. Welcome to our world.
{"commentId":2976345,"threadId":"312773","contentId":"1664179","authorDomain":"ynotville"}
{"commentId":2208654,"authorDomain":"gorlas"}
Investors need to keep pressure on the world economies so the financial system nears total collapse,then the end game may begin in earnest. The real powers that be in the world have the end game all mapped out.
To achieve the arrival and installation of the Anti-Christ the populace must be ready and willing to do anything to relieve their suffering. The mark of the beast will be one of the ways that the Anti-Christ will stabilize the world financial system.
To all you investors and commodities traders, Keep up the good work, we are almost to the goals of those who want the end game, as well as complete and total control over everything and everyone!
{"commentId":2208654,"threadId":"312773","contentId":"1664179","authorDomain":"gorlas"}
#10 - Wed Jul 16, 2008 6:19 PM EDT{"commentId":2405219,"authorDomain":"master-o-chi"}
So, you need the world to go to hell so you can make a better margin?
Hmmmmm.
{"commentId":2405219,"threadId":"312773","contentId":"1664179","authorDomain":"master-o-chi"}
- 1 vote
{"commentId":2259697,"authorDomain":"thomas-nelson"}
I am amazed at the weird logic of investors to raise stock price of banks since they did not lose as much money as predicted! That has got to come home to roost. I am in cash, and staying there until the adjustments occur. This market will go below 10,000 before it is over. The current optimism looks a lot like the oil manipulation to try to prop up stock prices, and that will fall like a house of cards.
{"commentId":2259697,"threadId":"312773","contentId":"1664179","authorDomain":"thomas-nelson"}
- 1 vote
#11 - Wed Jul 23, 2008 11:31 AM EDT{"commentId":2405208,"authorDomain":"master-o-chi"}
Or buy gold stock... the preferred investment of crackpots the world over.
{"commentId":2405208,"threadId":"312773","contentId":"1664179","authorDomain":"master-o-chi"}
- 2 votes
{"commentId":2844106,"authorDomain":"rics21"}
So far it appears that you are the smart one.
{"commentId":2844106,"threadId":"312773","contentId":"1664179","authorDomain":"rics21"}
{"commentId":2279681,"authorDomain":"marzypants1"}
Yep, its the end of the world! Go throw yourself out of a window now and spare yourself the trauma of living through the last few months. Just remember before you take the plunge that if your not a christian then you're jumping straight into hell. Would have been a pretty good world if it wernt for all of the Jews and blacks and gays and anyone who has a lot more money than I do...
{"commentId":2279681,"threadId":"312773","contentId":"1664179","authorDomain":"marzypants1"}
- 1 vote
#12 - Fri Jul 25, 2008 2:36 PM EDT{"commentId":2391338,"authorDomain":"brian-p-buckmaster"}
I think I'd rather jump straight to Hell than spend eternity with racial bigots like you.
{"commentId":2391338,"threadId":"312773","contentId":"1664179","authorDomain":"brian-p-buckmaster"}
- 2 votes
{"commentId":2405195,"authorDomain":"master-o-chi"}
Dude, guess what?
God is black, Jewish and from the colors of his rainbow, he is at the very least "gay friendly".
Welcome to heaven, you but we do not have any room for those of your ilk.
{"commentId":2405195,"threadId":"312773","contentId":"1664179","authorDomain":"master-o-chi"}
- 2 votes
{"commentId":2457969,"authorDomain":"lajlaj5"}
Don't forget the other theories people for you were once just an ameboa in a puddle...
{"commentId":2457969,"threadId":"312773","contentId":"1664179","authorDomain":"lajlaj5"}
{"commentId":2975414,"authorDomain":"marzypants1"}
Ummm...Hey. That was sarcasm, people. Just trying to make a point... sheesh...
{"commentId":2975414,"threadId":"312773","contentId":"1664179","authorDomain":"marzypants1"}
- 1 vote
{"commentId":2976451,"authorDomain":"ynotville"}
Point WELL taken! LOL & ROF!
{"commentId":2976451,"threadId":"312773","contentId":"1664179","authorDomain":"ynotville"}
{"commentId":2302966,"authorDomain":"brian-p-buckmaster"}
The last time the DOW took a dump - Fannie Mae was around $7.07. Time to buy - 1,000 shares. The next day FNM doubled. Woohoo! Easy money!
{"commentId":2302966,"threadId":"312773","contentId":"1664179","authorDomain":"brian-p-buckmaster"}
#13 - Mon Jul 28, 2008 4:36 PM EDT{"commentId":2305475,"authorDomain":"knh"}
This market meltdown was expected and preventable. When amateur speculators enter the game thinking it's free money, that sets in motion an artificial high followed by a leveling out, which feels like a crash. That said, when the controls were taken off the mortgage industry the obvious happened. Those who hate controls took advantage of it, which is why they hate controls, it tamps down their riskly behavior. Those who like a free market forget there is a lot of greedy manipulators out there. Think of it like a teenager - if you give them the car keys and no curfew sooner or later they will get
With mortgages, they used to be held at the bank you got them from, hence they had restrictions on who got the money since they were accountable. Once they were packaged and sold they were not held accountable so they could loan money to anyone whether they had decent credit or even a job. If they could sign their name they could buy a house. Variable interest rates were attractive to those who planned to watch the house gain value then sell. Like any other Ponzi scheme that only works for the first ones in.
Predictable and preventable. Lack of leadership. If you're the one making the laws you can make it legal to steal, and that's pretty much what happened.
{"commentId":2305475,"threadId":"312773","contentId":"1664179","authorDomain":"knh"}
- 2 votes
#14 - Mon Jul 28, 2008 10:32 PM EDT{"commentId":2546104,"authorDomain":"lighteningdodger"}
You have to remember a government that wanted to allow "everyone" the chance to own a home. Well, as expected...alot of people came running. The system was set up knowing that this population segment couldn't make good on their loans. Our socialist movers and shakers (in government) put in their royal waive and passed this mess along. Well.....here we are. Alot of the commentaries seem to forget the assets that are still around and will be for a long time to come. The banks are certain to know now that the herd has to be thinned and new paths have to be offered to those who are responsible for their promises.
{"commentId":2546104,"threadId":"312773","contentId":"1664179","authorDomain":"lighteningdodger"}
{"commentId":2313792,"authorDomain":"awalsh8174-1"}
What insanity we are witnessing. Merrill announces a new capital offering, and a huge writeoff, and the market rises as we were presented with great news. All Merrill did was establish a benchmark for the near-worthlessness of the mortgage-based securities that smear the financial houses' books. The other houses will now have to come to grips with their own losses; which will be beyond imagination. In the meantime, the Fed and the government lie to us and manipulate our markets. I don't think we have any free markets left. The final insult will be when the massive losses are passed on the taxpayer. My government has gone insane. For sure, I don't listen to the market pundits.
{"commentId":2313792,"threadId":"312773","contentId":"1664179","authorDomain":"awalsh8174-1"}
#15 - Tue Jul 29, 2008 6:00 PM EDT{"commentId":2393216,"authorDomain":"vagabondguy38"}
ROME IS BURNING
{"commentId":2393216,"threadId":"312773","contentId":"1664179","authorDomain":"vagabondguy38"}
- 3 votes
#16 - Thu Aug 7, 2008 4:19 PM EDT{"commentId":2405134,"authorDomain":"master-o-chi"}
The federal numbers have not "added up" for years.
Every department of government has been given leaders with orders to destroy the mission of that department. this is so years from now, the neo-conservatives can point to the mess (which they hope you will not noticed is their fault by then) and claim that government is too wasteful!
The Republicans ruin brilliant beneficial systems that took decades to fine-tune and fill them with hacks, cronies and lackeys. "Good Job, Brownie" indeed.
We once had effective departments, from FEMA to HUB to EEOC to FOMC and the Justice department, all now a stacked deck of incompentents and saboteurs. We could administer programs to the benefit of million of citizens at a reasonable cost. No more. The spanner is in the works now.
Thank you, Republicans... You have ruined the Bill of Rights, our economy, our social programs, our reputation in the world and now, sadly, even the value of the dollar.
Maybe if you make the lies bigger we won't notice.
{"commentId":2405134,"threadId":"312773","contentId":"1664179","authorDomain":"master-o-chi"}
- 5 votes
#17 - Fri Aug 8, 2008 5:54 PM EDT{"commentId":2976613,"authorDomain":"ynotville"}
And I thought I was the only one who had noticed. Can you get me an invitation to the Biden Secret Energy Summit? I have friends who work on oil rigs in the Gulf!
{"commentId":2976613,"threadId":"312773","contentId":"1664179","authorDomain":"ynotville"}
{"commentId":2602325,"authorDomain":"tleps"}
Just a comment on the silly "poll" they had up on MSNBC. What about "sold out last November and moved to foreign funds"? Nothing surprising about what is going on at all, the writing was all over the wall... I find it annoying because some moron is going to use it as "proof" of some viewpoint, except anyone who actually has the funds to invest (not 401K stuff where choices are limited) would choose many things outside of their patently simplistic choices.
As to the above comment from "hamster" on the up-tick rule – scapegoating solves nothing. Shorting is a very valid and even necessary aspect to the market. Look what happened when the rules about shorting the favored sector expired a week ago – the market will find its own level. Some will win, some will lose, but artificially stacking the deck in order to prop failed institutions up only works for a short time. Eventually the piper will win. I'm also not sure when the idea of perpetual "bull" markets took hold. As we see, when they are created falsely the fall will be even worse than if they had simply allowed the markets to work without all the B.S. they instill into it. I should note that I do believe in regulation and enforcing said regulations. Constantly messaging them for the benefit of specific sectors\companies\favored cronies or simply failing to enforce period is the problem. Oh, and when it all fully crashes that "money" in the mattress will be worthless – unlike historical forms of money ours truly is "just paper", after its collapse it will be worth -0-. 100 years ago you could at least melt those coins and continue trading the base metals for needed items.
As for Chicago Observer - I haven't lost anything this year – in fact it looks like my family even managed to pull a few profits out of the markets, how 'bout you? Not sure I'd go stocks over physical, but the "crackpots" have been doing very well indeed – and have been in real terms for a decade (that would be the same decade the stock market has returned -0- in real returns... look it up).
I fear many of my fellow countrymen are about to learn a very harsh lesson about money – what it is, and what it isn't... and why you really can't "print" it to get out of a jam. Might want to read up on "The Colonial" and what our founders learned about "paper money" as a result. Afterwards maybe those rules in the Constitution concerning money and our Governments responsibilities in regards to it will start to make sense. Too bad our senators got bought off 100 years ago and sold us all out to the FED.
{"commentId":2602325,"threadId":"312773","contentId":"1664179","authorDomain":"tleps"}
#18 - Wed Aug 27, 2008 1:45 AM EDT{"commentId":2603513,"authorDomain":"kevten"}
George W Bush and dimwit US Labor Secretary have rarely met the minimum monthly jobs creation target. It takes 100K-130K new jobs created per month just to absorb new graduates. If your job has gone offshore, it's not coming back. Republicans are lying. Republicans don't care. US unemployment is at 14% while CEO salaries and corporate profits have been soaring.
But how are Republicans, Alan Greenspan, Ben Bernanke, Wall Street, dumb enough to think mortgage payments can reset to a higher monthly payment?
Enjoy the comedy as Roger Ailes, Fox CEO, Rush Limbaugh, drug addict, and the Swift Boat Veterans for Truth try to distance the Republicon party from George W Bush. Overall, it's good for Americans to learn the hard way that Bush Tax Cuts don't work; they cannot keep up with the labor pools available in Indian, China, and the rest of Asia.
{"commentId":2603513,"threadId":"312773","contentId":"1664179","authorDomain":"kevten"}
#19 - Wed Aug 27, 2008 6:59 AM EDT{"commentId":2622115,"authorDomain":"dalthaus"}
Well, boys and girls, roughly 60 days before the election and suddenly things are starting to get better... or at least they want you to think they are! The lesson here is not about money and markets, the lesson here is being able to trust our leaders at all levels. I am very sorry to say that over the past seven years, I have learned that if a conservative has said it, I need to take all of the time and do all of the research necessary to see if they are right or not... and that is just if they say the sky is blue. A friend of mine at K Mart (she is a liberal so I can trust what she says) was talking about all of the professionals and para-professionals who have applied for the few jobs that are available... they earn just enough to take them off of the jobless roles and just enough to forestall the bankruptcy... but this meets the criteria...
{"commentId":2622115,"threadId":"312773","contentId":"1664179","authorDomain":"dalthaus"}
#20 - Thu Aug 28, 2008 2:15 PM EDT{"commentId":2941452,"authorDomain":"moodyp"}
For more of the same, Vote Mc cain
{"commentId":2941452,"threadId":"312773","contentId":"1664179","authorDomain":"moodyp"}
- 2 votes
#21 - Mon Sep 15, 2008 5:19 PM EDT{"commentId":2941688,"authorDomain":"baileyt2"}
I'll bet Bin Laden is laughing his ass off in some Pakistani cave. Remember he said that it was his goal to see the US as a shadow of its former self, and Dubbya played right into his hands. Thanks, folks. I predict the Dow will fall below 10,000, and will be no higher than 12,000 5 years from now. That would be a fair return for new investors, but sucks for those who are in already in the market.
{"commentId":2941688,"threadId":"312773","contentId":"1664179","authorDomain":"baileyt2"}
- 1 vote
#22 - Mon Sep 15, 2008 5:37 PM EDT{"commentId":2978045,"authorDomain":"baghua"}
Yes, Bin Laden IS laughing. Does our governmant not get it? Why have we not looked to capture him? With the money and power he has, I feel Bin Laden is the one responsible for what's happeneing with our economy RIGHT NOW. He IS the anti-christ and needs to be taken out, before he corrupts another human being and leaves millions begging.
{"commentId":2978045,"threadId":"312773","contentId":"1664179","authorDomain":"baghua"}
{"commentId":2988304,"authorDomain":"gregziglar"}
I absolutely agree that 9/11 wasn't about the towers, and wasn't about September 11, 2001. It was about the long-term destruction of the economy of America. It's going to be hard to recover.
{"commentId":2988304,"threadId":"312773","contentId":"1664179","authorDomain":"gregziglar"}
- 1 vote
{"commentId":2971784,"authorDomain":"kelly-kane"}
We need more DEregulation.
Deregulate the American people to take these corrupt, greedy thieves & incompetents "out behind the woodshed".
The average citizen has been regulated to death and these bozos have been allowed to bankrupt institutions that survived the great depression.
Have you had Enough? Do you want some More?
These firms that are in trouble now paid out billions in bonuses last year when they were losing money. Now everyone is in the soup. The country needs a complete change in thinking and leadership.
{"commentId":2971784,"threadId":"312773","contentId":"1664179","authorDomain":"kelly-kane"}
- 2 votes
#23 - Wed Sep 17, 2008 1:22 PM EDT{"commentId":2975706,"authorDomain":"schwannomin"}
You better believe it! It is time to change up Washington from the White House right down to Wall Street!
YES WE CAN!
{"commentId":2975706,"threadId":"312773","contentId":"1664179","authorDomain":"schwannomin"}
- 1 vote
{"commentId":2972662,"authorDomain":"jrs-14618"}
If the market is "too smart" that the government bailout of AIG is not enough where was some of the same logic that got AIG and the rest of the investment bankers in hock to the situation they are in????
{"commentId":2972662,"threadId":"312773","contentId":"1664179","authorDomain":"jrs-14618"}
#24 - Wed Sep 17, 2008 2:13 PM EDT{"commentId":2975193,"authorDomain":"realdogmatic2"}
All you people who voted BUSH in for a FIRST AND SECOND TERM....Deserve all that is coming your way...and MORE! I am so glad that you feel like he is like one of you...a person you can invite to your house and have dinner with.... The writing was on the wall...what Bush did as governor...just as it is for McCain...and the S&L scandal. But of course it don't matter as long as he looks like you....well we ALL will look the same in the SOUP line......idiots.
{"commentId":2975193,"threadId":"312773","contentId":"1664179","authorDomain":"realdogmatic2"}
- 2 votes
#25 - Wed Sep 17, 2008 4:31 PM EDT{"commentId":2975290,"authorDomain":"jeande416"}
You got that right.............one race...the human race and we are all in this together
{"commentId":2975290,"threadId":"312773","contentId":"1664179","authorDomain":"jeande416"}
- 2 votes
{"commentId":2993135,"authorDomain":"gbanerjee2"}
true, but what about us folks who never voted for Dumbya? we sink as well. Oh, well
{"commentId":2993135,"threadId":"312773","contentId":"1664179","authorDomain":"gbanerjee2"}
- 1 vote
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