Unsettled Economy & The Bailout

[GregLee]

Re: Unsettled Economy

How do we guarantee that there will be anyone to buy these notes? We have notes issued by a government that is seriously in debt, guaranteeing what is now junk stock. I'm not interested in buying.

I believe treasure notes are sold at auction. The price will go as low as required to provide an incentive to buy, given the nominal interest rate. It's conceivable that investors might come to doubt the government's ability to pay its obligations, but we're nowhere near that point. US government obligations attract large amounts of investment capital from around the world, because they are safe, comparatively speaking.

Yes, that is right, they just print more money, which leads to inflation.

That's the effect.

Can you give me your take an my assertion that guaranteeing these junk stocks only assures that investors who took a risk will not lose money and assure that stock brokers will continue to make money by propping up a sagging stock market.

Those are two of the effects, though they are not the only effects.

[matapule]

Re: Unsettled Economy

I think the proposed, compromise bailout plan isn't going to work. It is throwing good money after bad. Columnist David Sirota lists the top 5 reasons against the $700B bailout:

1. Bailout's inherent fiscal insanity could make problem worse.
2. Experts on both the Left and the Right say that this bailout could make problem worse.
3. There are clearly better and safer alternatives.
4. Any incumbent voting for this puts themselves at risk of being thrown out of office.
5. Corruption and sleaze are swirling around these bailouts - and Americans know it.

You can read the article in detail here.

[Ron Whitfield]

Bailout fails, stocks fall

Nancy Pelosi helped defeat the congress' massive bailout.

I think this is a good thing and hope that a real plan can be put together to help everybody.

[matapule]

Re: Bailout fails, stocks fall

I think this government proposal is not in the best interests of the American taxpayer. This whole mess still smells to high heaven. We are not ready to put this baby to rest. Let the stock market go to hell in a hand basket and yes I will be losing some of my retirement savings. But I feel I will lose even more if the plan passes in this form. We need an entirely new approach to solving the problem. I am glad Congress is having to work overtime. They helped create this mess they can work overtime to fix it.

Why are there no professional economists involved in the proposals for a solution? Why is it that there are just political hacks and Wall Street professionals who are making the proposal? I am glad this plan failed! I am damned mad and I'm not going to take it anymore!

This is what I posted on the "Unsettled Economy" thread an hour ago:

I think the proposed, compromise bailout plan isn't going to work. It is throwing good money after bad. Columnist David Sirota lists the top 5 reasons against the $700B bailout:

1. Bailout's inherent fiscal insanity could make problem worse.
2. Experts on both the Left and the Right say that this bailout could make problem worse.
3. There are clearly better and safer alternatives.
4. Any incumbent voting for this puts themselves at risk of being thrown out of office.
5. Corruption and sleaze are swirling around these bailouts - and Americans know it.

You can read the article in detail here.

[kani-lehua]

Re: Bailout fails, stocks fall

most definitely ron and matapule.

however, i'm wondering how this is going to affect our attempts in acquiring a mortgage loan for the house we are making an offer on? we prequalified for "x" amount at the end of last month which could mean that we do not qualify for that amount today? our offer is being presented to the seller today...we'll see what happens.

in the meantime, houses are sitting on the market longer and longer and sellers are unable to move them because the lenders are becoming more stringent with extending credit. prices are dropping and realtors/sellers are trying all kinds of methods/combinations to find a buyer.

[tutusue]

Re: Bailout fails, stocks fall

[...]
however, i'm wondering how this is going to affect our attempts in acquiring a mortgage loan for the house we are making an offer on? we prequalified for "x" amount at the end of last month which could mean that we do not qualify for that amount today? our offer is being presented to the seller today...we'll see what happens.[...]

Kani...hopefully your offer is contingent upon obtaining financing or that you have another contingency to fall back on should you be unable to get financing.

[Random]

Re: Bailout fails, stocks fall

most definitely ron and matapule.

however, i'm wondering how this is going to affect our attempts in acquiring a mortgage loan for the house we are making an offer on? we prequalified for "x" amount at the end of last month which could mean that we do not qualify for that amount today? our offer is being presented to the seller today...we'll see what happens.

Just don't hold your breath.

I wonder if what Nancy said in her speech was deliberate, or could those angry Republicans set aside their party loyalty and do what's right for our economy.

I ask again, shall we let the market sort itself out, and if so, when we will see the light at the end of the tunnel, before and after the Second Depression? How long do we hold out?

How does the global markets sees our American dollar? Weak and unchanged, ergo lacking confidence? Getting worse, also lacking confidence? Or a chance to become strong again?

I hear small businesses are affected by this because they cannot get banks and financial institutions to approve/renew a line of credit or loan.

[kani-lehua]

Re: Bailout fails, stocks fall

Kani...hopefully your offer is contingent upon obtaining financing or that you have another contingency to fall back on should you be unable to get financing.

thank you. yes it is.

[matapule]

Re: Bailout fails, stocks fall

however, i'm wondering how this is going to affect our attempts in acquiring a mortgage loan for the house we are making an offer on? we prequalified for "x" amount at the end of last month which could mean that we do not qualify for that amount today? our offer is being presented to the seller today...we'll see what happens.

You ask a good question and I don't have an answer. I understand that if a bailout package is not passed, credit will dry up across the board. In other words people are going to have to pay cash for pretty much everything - TVs, cars, houses, etc. How this will affect you when you are prequalified is hard to tell and I don't think anybody can give you a firm answer right now.

I have two suggestions for you to explore if your deal falls through for lack of financing.

1. ask the seller to take back the paper on the sale (the seller provides the financing)

or 2. Ask the seller for a lease option to purchase, with all lease payments applied to the purcahse price when you are able to secure financing at some time in the future.

in the meantime, houses are sitting on the market longer and longer and sellers are unable to move them because the lenders are becoming more stringent with extending credit. prices are dropping and realtors/sellers are trying all kinds of methods/combinations to find a buyer.

And that is why this may not be a good time for you to buy that house. You may be able to pick it up for a lot less at sometime in the future.

I feel for you. I hope that things turn out well for you. I hope you keep us posted, in general terms, how this plays out for you. We can all learn through your experience. Now is the time, more than ever, that we come together as ohana. These are challenging times, but certainly not a time to panic. If nothing else, maybe we can give you some moral support.

monomanomonuia (good luck)

[Frankie's Market]

Re: Bailout fails, stocks fall

This is what I posted on the "Unsettled Economy" thread an hour ago:

Yes, so it necessary for you to repeat it again, rather than simply link to that post?

As a matter of fact, is this thread (as well as the WaMu thread) necessary, since we already had the "unsettled economy" thread established? Moderators?

[matapule]

Re: Bailout fails, stocks fall

Yes, so it necessary for you to repeat it again, rather than simply link to that post?

Yes, in my opinion, I felt it was necessary. You are free to disagree, which I guess you are.

[Frankie's Market]

Re: Bailout fails, stocks fall

Yes, in my opinion, I felt it was necessary. You are free to disagree, which I guess you are.

Don't take it personally. It has nothing to do with the content or merits of your post. Consolidating these 2 new threads back into Kalalau's Unsettled Economy thread is all about keeping this discussion organized in a way that will be easy for everyone to follow, rather than having it scattered all over the place in several threads and to reduce duplication.

[kani-lehua]

Re: Bailout fails, stocks fall

I feel for you. I hope that things turn out well for you. I hope you keep us posted, in general terms, how this plays out for you. We can all learn through your experience. Now is the time, more than ever, that we come together as ohana. These are challenging times, but certainly not a time to panic. If nothing else, maybe we can give you some moral support.

monomanomonuia (good luck)

we won't feel bad if it doesn't go through. we WANT to buy another home, but don't NEED to as we own two other houses on o'ahu already. if it happens, it happens. real estate is in the buyer's hands if they can get the financing. prices are dropping drastically and houses are sitting on the market for months.

[Random]

Re: Bailout fails, stocks fall

we won't feel bad if it doesn't go through. we WANT to buy another home, but don't NEED to as we own two other houses on o'ahu already. if it happens, it happens. real estate is in the buyer's hands if they can get the financing. prices are dropping drastically and houses are sitting on the market for months.

You already have three houses? Might as well get one more and make it a seasonal thing (Winter home, Spring home, Summer home, and Autumn home).

[Konaguy]

Re: Bailout fails, stocks fall

Hopefully Congress will be able to reach an amicable agreement on this matter within the next couple days. If not we’ll be probably seeing the economy falter further and more layoffs. There is even a possibility we may be facing another Great Depression. Especially since banks have severely curtailed extending credit to main street and other banks.The economy can’t recover or grow without banks extending credit.