Comments on: 5 People In Today’s Economy That Need To STFU

By: Doles

Doles — Thu, 02 Oct 2008 18:39:54 +0000

I agree with your “buy now, pay later” statement. Imagine how much cheaper things would have to be without all this credit being extended.

By: Palsh

Palsh — Thu, 02 Oct 2008 07:56:28 +0000

I find it very disconcerting that I live in Canada, and actually, quite far away from the rest of the country, hahaha, and I know more about the politics and general going-on’s of the US than I know about my own country. Now I don’t follow politics anyways, I don’t vote, and I stand by that decision as full-heartedly as someone stands by their decision to vote for this group or that. I don’t vote because I have no interest in it, I have no complaints about the government that justify myself complaining. I just find it very irksome that I know all this going on and people telling me “its the start of the next Great Depression!”. I somehow doubt that. First of all, what sparked the Great Depression? Do you think if the same thing happened now, would our economy be screwed like then? And like you said, real estate makes up less than 5% of the GDP. All hail the president for putting people on edge all to make it look like he’s on top of things and is paying attention, and not reading Superfudge. (ahhh, Family Guy)
Great post, Beard Man!

By: Jon

Jon — Thu, 02 Oct 2008 01:25:07 +0000

@BonzoGal: Two men enter! One man leaves!

@KF Chud: The news skews. I completely agree.

@n0ia: Thanks. I normally don’t get involved either, but the presidential speech pissed me off enough that I couldn’t help it. I was waiting for the 3 easy payments part to come on the screen.

@Sarah: Of course you do. I stole the whole post out of your economics notebook. MUAH HA HA HA HA

@M-shel: If you’re not sure what will solve the problem, you would fit in with a lot of people who make a lot of money in DC.

@Doles: The availability of credit and the idea of “buy now, pay later” have become so deeply ingrained over the fifty years, that I’m not surprised.

@Geoff: I have to disagree. The original provisions of the plan called for the Treasury to secure an equity stake in companies that sold its bad debt to the government.

Even if that provision were struck from the plan, the government’s role is not to save people from being foreclosed on or to be a giant money making machine. The government is not a mortgage company, and it’s not a parent. It’s role isn’t to protect people or corporations from error. If granted that right, its inherent inefficiency will cause it to perform more poorly than a private company.

And who’s going to listen to Jim Cramer? Cramer once said about his hedge fund managing days, “What’s important when you are in that hedge-fund mode is to not do anything remotely truthful because the truth is so against your view, that it’s important to create a new truth, to develop a fiction.” (see the article in the WSJ) Does that sound like someone to trust? I don’t think so.

By: Geoff

Geoff — Wed, 01 Oct 2008 23:45:06 +0000

“Purchasing a 700 billion dollar stake in companies that are failing”

This is not the plan, and it’s this kind of incorrect characterization of it that is fomenting so much opposition. It’s BUYING the distressed mortgages from the companies that are failing. This saves a lot of people from being foreclosed, because it gives them time to catch up on payments/restructure… and in the end, some (like Jim Cramer) suggest the taxpayers will actually MAKE money. It’s also being described as the only way to get an accurate reading of the value of these mortgages.

By: Doles

Doles — Wed, 01 Oct 2008 20:53:10 +0000

Great post!…though you left one part out of the mortgage post. Yes, you shouldn’t bite off more than you can chew. However, it’s not just the borrowers fault. Remember, the lenders are the experts. The real estate prices (and rentals) were falsely inflated by the greedy lenders and investors who are a lot more knowlegeable than the buyer. If lenders gave traditional, fixed, full doc loans then the $150,000 home would be worth $170,000, instead of $350,000. This would keep homes what they were intended to be…HOMES, not falsely inflated investments. More people would have been able to qualify for a reasonably priced home. Also, what brokers don’t tell you is that your paying a higher rate because they’re shopping the loan for you or that you could have qualified for a better loan. Many of them also break Massachusetts law by placing people who were in good loans into bad loans. Now, we have people who had the right intentions in hot water. Their credit is now ruined, in some cases, retirement money used to try to stay afloat. Not only do they lose their homes, they have bad credit and will have a hard time renting a place. When a CEO screws up, he takes his 20 million and goes home. These former home owners could be screwed for life.

By: M-shel

M-shel — Wed, 01 Oct 2008 18:07:41 +0000

My issue comes with the trickle down…the upper echelon causes a panic and then suddenly I’m paying more money for EVERYTHING—gas, groceries, homegoods, rent, insurance…so forth and so on.

I don’t think a bailout is the answer, but I’m not savvy enough to know what the answer is. I just want to be able to afford to live—you’d think that wouldn’t be too much to ask.

By: Sarah

Sarah — Wed, 01 Oct 2008 18:01:23 +0000

Completely agree on all counts.

By: n0ia

n0ia — Wed, 01 Oct 2008 16:51:23 +0000

Excellent post. I usually don’t get involved with other people about politics/economics/whatever the government happens to be up to, but I do have my thoughts.

This kind of stuff is what I like to read. And that whole television stunt that Bush pulled really pissed me off cause I was about to start watching a show that came on at that very moment. I’d much rather watch a show than to hear him rattle off about how we need to be giving a ton of money to a bunch of rich people.

By: KF Chud

KF Chud — Wed, 01 Oct 2008 16:14:01 +0000

My two biggest gripes are: 1. The Politicians and all their speeches, bi-partisanship, egos, etc. I just roll my eyes at how important they try to sound. And to put a cherry on this, the Reps keep saying this is the most important bill to work on/pass in their lifetime. And what do they do? Go on recess. (roll eyes here).

2. All the news channels: Every news channel has a bunch of talking heads talking in all this financial chatter, blah blah blah. Just watching those channels will scare you to death. If it wasn’t the hurricanes that take you out, then it’s gas prices. If not gas, then the economy. It’s up to the point where I don’t watch anymore. Too much chatter.

The Thunderdome solution is the best solution. Strongest wins. We get entertained. win-win for all!

By: BonzoGal

BonzoGal — Wed, 01 Oct 2008 15:54:51 +0000

Amen x infinity. I’m sending this around to all my freaked out friends and relatives (including my freaked out husband). Notice that the bailout didn’t happen right away and WE’RE ALL STILL HERE and the sky hasn’t fallen.

Still, I wouldn’t mind if the Thunderdome was really instituted…