Bear Stearns, Fannie Mae, Freddie Mac, and now, AIG… so the question is: what the hell did Lehman Brothers do to piss off Ben Bernanke?
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Just not big enough.
Paulson rather than Bernanke I think.
I’m gonna incorporate myself, sell shares, and load up on debt so I can get a bailout from the GOP Party commies, too!
This meltdown was brought to you by the people who want to privatize your Social Security checks.
Oh, and let’s not forget all the state jobs that Dinosourpuss wants to privatize …
Here’s how job privatization works. Taxpayers have to pay private mercenaries $150,000 a year and give them a license to kill innocent Iraqi civilians, while $15,000-a-year soldiers still get all the hard dirty patrolling and fatigue duties and all the bleeding and dying, and are warehoused in rotting hospital barracks while they wait in line for the U.S. Army’s socialized medical care.
Maybe Lehman was too much Donkey and he didn’t want to have the same fish wrapper smell as Alan Greenspan, Mr Andrea Mitchell of NBC.
McCain Flip Flops On Economy
Yesterday, McCain said the economy is “fundamentally sound.” Today, he said it’s in “total crisis.” I hate to see what he thinks tomorrow might bring; but I understand Palin is shopping for a Rapture Day dress.
It’s funny that this Republican could practically walk on water at one time to most wingnuts.
Wow. You would have expected the market to react positively to the AIG bailout. I guess not. As of 10:17 a.m. PDT, the market is down over 300 points. The DJIA rests at 10,758.17, within easy striking distance of it’s level of 10,505.46 as of Jan. 20, 2001, the day Bush took office eight years ago.
For those who are counting, if you invested in a DJIA indexed fund on Jan. 20, 2008, your return on investment Ias of this moment) would be 2.41% – or an average annual return of 0.64%. With inflation, you’ve actually lost quite a bit of money. So much for those who say that having a Republican President is “good for business”.
For those wingnuts who want to accuse me of reacting “with glee” at the financials collapse, allow me to point out that as of the closing of the market yesterday, my 401(k) plan has lost 20.5% of it’s value over the past year. And that’s with me continuing to put in 15% of my salary, along with my employer’s matching funds.
Hopefully my current contributions are “buying stock cheap” which I can recapture later, but if not I’m left with another year or two I have to work before I can afford to retire.
My company’s 401(k) plan only provides a handful of mutual fund options, so I can’t do anything fancy with it to bet on a bad market. I’m stuck with what they offer.
RHP @9,
According to Yahoo Finance the DJIA closed at 10,587.59 on Jan 19, 2001, the day before President Bush’s inauguration, so that’s the figure I’ve been using as the break-even point on this administration.
It’s like this:
AIG is an insurance company, who insures these securities that are going south. If they go down, the whole Ponzi scheme comes unraveled at once. Letting Lehman go means that other banks get to pick over the scraps (Barclay’s perhaps)and people like AIG may cover the rest–China is on the hook for a bunch of this as well–we don’t want to default to China, would be my guess. Just sayin’.
The Fed has a finite amount of liquidity they can make available before we see hyper inflation. At a certain point they might be doling out tough love to WaMu too–goodbye Seattle markets. My guess that the added risk of inflation is a big reason why the Fed didn’t reduce rates–that puts even more pressure on inflation; though that may all be moot, if its merely a choice between letting the rest of these banks (and countries) who are in securities up to their ass shit the bed, and injecting so much cash that the printing presses are running overtime, greatly reducing the value of the dollar–hyper inflation.
Hyper inflation is how Germany defaulted on their debt to Europe post WW 1. From a historical perspective, the scenario we have before us is quite scary. For economic collapse brings fear, and we know what the Republican Party of Fear has in store for us if they are elected, and this chaos on Wall Street continues. Since we have nothing of value to produce, the only export we have is worthless paper and the business end of a missile.
Show me a real social democracy that didn’t have to face fascism square in the face in recent history first in order to evolve toward social democracy (last 100 years), and I’ll show you a country that doesn’t seem to want it any other way. I don’t want ot think about what kind of power vacuum we may have if the election process goes haywire this time around–that may be the Republican’s only hope of staying in power indefinitely.
But for now, we can forget about this and talk more about Sarah “Buzz Windrip” Palin, the best diversion since Willie Horton.
Was it Puddy or someone else who posted in a thread yesterday that Lehman’s boss was a big-time donor to the Democrats?
Meanwhile, Morgan Stanley and Goldman Sachs are circling the drain, and WaMu is desperately pimping itself out in search of somebody dumb enough to buy it.
We have money stuffed in a lot of mutual ratholes. One of ’em, which is highly respected and has an exemplary track record, just sent us a quarterly report of significant losses, whose first-page “Letter to Investors” is basically a sheepish apology by the fund managers for how badly they fucked up.
Art @ 14: I just checked my 401(k) funds to see whether I just made the wrong choices in my fund selection/mix. I’ve got 25% in foreign funds, about 15% in a mid-cap growth fund, and the rest split between two large-cap growth funds. Funny, ALL of them lost between 18% and 25% this year to date. And other than bond funds, those are my sole choices in my 401(k) plan. I guess my 20.5% loss in my total fund value wasn’t too bad, considering it’s on the lower range of the fund losses available to me.
I’m thinking lots of people are going to be receiving quarterly reports from their brokerage firms of 401(K) plans which are going to knock them on the floor. My plan tends to send out the notices about a month after the end of the quarter, which means they will be arriving in the mailbox just a week or so before the election.
Just before noon PDT, the DJIA has rallied a bit, with “only” a 243.53 point loss at 10,815.49. But trading looks pretty volatile, anything could happen in the final hour.
Goldy:
Your 10,587.59 is correct. I was mistakenly looking at the closing number at the end of Bush’s first term, rather than the closing number at the start of that term of office.
15 I think the best to hope for at this point is for you (or the funds you own) to be invested in stocks of companies that may lose value through the current crisis, but aren’t likely to go tits up. Then when things turn around (and someday they will) you’ll own a lot of undervalued stocks that will march right back up with the market. Even after 1929, the securities market saw a slow recovery over the next few years–but “meanwhile, back at the economy”, things were pretty grim with so many people un- or under-employed.
In the short term, we’re all screwed. If this was the year you were planning to retire, it sucks being you.
Art;
Well, I wasn’t planning on withdrawing money now, or juggling things around at the bottom of the market (at least, we hope it’s the bottom). I’ve got about fifteen more years of work-life left before retirement, so I’ve still got some time.
If we see a big recovery over the long run I’m not hurt, but if the whole U.S. economy continues to decline in the “fundamentals” (more out-sourcing, weak oversight of critical areas, underfunded education system, etc.), the recovery might not be that strong.
yelling loser boy@8, are you saying he’s the anti-James Carville married to an avowed Donkey MSMer Andrea Mitchell, the anti-Mary Matalin?
Just checking, cuz most your stuff is clueless and irrational.
tpn@12: Willie Horton? Thank Al Gorebasm for Willie. That’s why I call him ExLax. It was a smooth move in 1988.
ArtFart@13, Yes it was a PuddyFact Lehman CEO loved the Donkey. And if you remember my post (well you did remember something past 24 hrs – congrats) on Goldman Sachs, Robert Rubin came from GS. I haven’t worked on Morgan Stanley info yet.
ArtFart@13, Robert Rubin CEO of Citibank ex-Clinton Treasury Head, $100 Million man. Of course, he’s one of those little people the Donkey love to discuss supporting Obama. You need to study all his proteges on Obama’s economic team, since rhp6033 won’t perform an even handed evaluation.
ArtFart@13, Most of the loonies here love to claim Puddy is a copy and paster. That’s fine.
But if you navigate back through the HA morass, you’ll see I identified many of these players before this happened. Yet all we have here is BDS morphing into PDS.
@7. Roger Rabbit
Have you given Obama his talking points today?
Unless you do he’s lost for words.
Oh, no calling him as he has a bad memory Text him then he can upload it to the Teleprompter.
rhp6033: you guys have owned the US Education system since the start of Johnson’s Great Society in 1965.
Since I have 9 family members under the NEA thumb, what have they wrought?
Speaking about Philly, a place I still love –
Inner city schools falling down.
Inner city schools lacking in technology
Inner city schools with teachers marking time
Inner city schools where hoodlums own and rule
Dumbed down curriculum
Students entering college needing remedial English and Math skills
WA State, what has the WEA wrought
Dumbed down curriculum
Students entering college needing remedial English and Math skills
A WASL test that teachers teach to instead of real life skills in all subjects
Parents complaining the WASL is to hard for Suzy and Tommy. Let’s dumb it down or get rid of it instead of taking interest in their kids education and what they are learning.
Yessireee, this is your rail and you guys have moved us from 4th in 1965 to something below 20th in industrialized nation status. Great job liberals.
Puddy @ 25;
Wrong thread. Go to the thread on the WEA endorsement to complain about the education system. You’ll see that not all of us are happy with the current state either, but you have to be prepared to give intelligent suggestions rather than slogans.
rhp6033: above you wrote underfunded education system.
That was my response. Did you forget what you typed like you forgot about Jumpin Jim Jeffords?
Wow. So much for a late-afternoon rally. Things really started collapsing at the end. I’m not sure if this is the closing price (there seemed a lot of volitility at the end, I’m not sure if the numbers kept up with the volume), but it appears the DJIA lost 449.36 points today, closing at 10,609.66.
That’s only 20.07 points above the starting DJIA at the start of the Bush administration almost eight years ago. The Bush administration’s economic record, as measured by DJIA performance, is a dismal 0.21% return on investment, or an average of 0.06% average return per year – not accounting for the negative affects of inflation.
RHP
WHAT the Hell are you thinking??? You should have moved your 401K to cash a long time ago. If I were you, that’s exactly what I’d do.
Trying to predict the bottom of any trend is foolish.
Keeping your money in a trade / account / or fund that is trending downward is just down right dangerous for your financial health.
Any good trader will tell you limit your losses and trade with the positive momentum.
Not making any gains right now is far better than losing the money your working for today and piling more of it into a losing position or mutual fund.
Get OUT. get out NOW.
Call your broker now and liqudate your assets in to a cash account, CD or something much safer.
29: That would be a nice strategy, but it isn’t available. I can’t make a withdrawal from the 401(k) plan without (a) quiting the firm, or (b) applying for a hardship withdrawal (for medical reasons, etc.), which our firm has never authorized.
My only other option within the plan is to switch to the couple of bond funds available, but if we really are near the bottom of this cycle that would be a really bad move. Putting it into a cash position simply isn’t available.
Yea, I know, it stinks. But at least I get employer matching. One change I am making is to reduce my contribution (that’s in excess of matching) a bit into the 401(k) and to put that money into a Roth IRA instead.
WAMU is the next one to fail.
http://news.yahoo.com/s/nm/200.....nmutual_dc
Forget the big investment houses and AIG. How many banks have failed on the Chimp Administration’s watch in the last two years?
A dozen?
It’s all on your corrupt, ugly party wingnuts. All on the Republicans. You called the tune. You cheered on the gridlock. You set the tone. Your ugly tone. These are the consequence of putting your party and your selfish wants before your country.
29 Sell everything off and put it in CASH???? Then what? Use the greenbacks for butt wipes? That’s all they’re going to be good for as the Fed keeps red-lining the printing presses to try to stave off the inevitable.
And if you go look at what’s happening at the London stock exchange, you’ll see that the fun’s just going to keep right on as we sleep.
There’s a major screwin’ going on here, and to borrow a phrase from Tom Waits, “even the crack of dawn ain’t safe”.
@9 and 11 rhp6033 and Goldy :
The S&P500, a better measure of the broad market is down ~10% from where it was January 20, 2001.
Dave & 33: I thought about using the other measures (Nasdaq & S&P), but I didn’t have time to track them all, and the DJIA is what the news media uses as a general measurement, so I kept with that one.
One reason for saving AIG: it insures the municiple bond market. The collapse earlier this year of some smaller insurers have left cities teetering on the edge of bankruptcy, as their bond rates jumped up. The collapse of AIG might have triggered the bankruptcy of hundreds of municipalities across the country, as they can’t market their bonds at any price.