Burning down the house: What Caused Our Economic Crisis?
http://www.youtube.com/watch?v=F0Dy1jAXnIw

The people who will be hit the hardest right away, and for a long time to come, are the pensioners, the ones who just retired, are retiring, or are retiring soon. A huge chunk of their savings, their future, the comfort they had hoped for for so long, just went up in smoke.

These are the people who had been stuffing cash into the system for years, the people who had been keeping the system going. These are the people who thought the bubble would be their "rainy day".

Well, this is their bubble. This is their "rainy day". And it's blowing through like a hurricane off the Gulf of Mexico.

For those who are still earning and saving, feel for them.

Tomorrow, it will be you.

So how did we get here?

Subprime mortgages? Bad debt? Easy money? Where did they come from?

Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam (C-span footage)
http://www.youtube.com/watch?v=_MGT_cSi7Rs

Fannie Mae CEO calling Obama and the Dems the "Family" and "Conscience" of Fannie Mae (C-span footage)
http://www.youtube.com/watch?v=usvG-s_Ssb0

Time Warner who contributed over $300,000 to Barack Obama's campaign has already tried to force a takedown of the following video that just over the weekend had jumped from 200,000 to over 1,000,000 hits. But people are reposting it and reposting it.

Burning down the house: What Caused Our Economic Crisis?
http://www.youtube.com/watch?v=TxgSubmiGt8

As for those out there who would be thrilled to see Wall St. go belly up, please think deeper. Wall st. IS Main St. There are a lot of jobs, a lot of families, a lot of homes, a lot of lives at stake in this disaster, this well-engineered disaster, and not just white-collar ones. These companies finance other companies, manufacturing companies, even green companies. Lehman Bros. was a big backer of Al Gore's green projects. If you look more closely at who were financed by, and who in turn financed these Big Bad Wolves of Wall St., you'll find lots of companies from both camps, and many - if not most - who couldn't give a damn about Hatfield-McCoy politics, who will suffer tremendously from all this.

And for what? So the Dems could champion "affordable housing" without getting their political hands dirty by raising taxes. Subprime mortgages and easy credit was their Camelot. They forced lenders to issue subprime loans to people who couldn't afford to pay, and they championed easy credit to anyone who wanted them but mostly to those financially ill-equipped to play the money game.

For years, the Dems have consistently propped up Fannie Mae and Freddie Mac as "The Untouchables". They're still propping it up and will keep propping it up until the blood becomes just too overwhelming to ignore.

That's what I suspected. So the rationale for using our taxpayer money for a bailout of these acknowledged risks is.... what, exactly? Anyone?

The lastest codewords I've heard used now are along the lines of "an infusion of confidence" in the market. Well, shoot, I'll bequeath you all confidence. I'll give the markets a friendly chuck on the chin and tell them to buck up, little camper. Tell them grey skies gonna clear up. Sing Hallelujah c'mon get happy. But do not expect the American public to pay dime one for so much as a motivational poster to put on the wall when there was a bill proposed with explicitly no oversight on $700 billion to ameliorate private debt on admitted risk that most of us prudently refused to buy into the the first place.

There is no guarantee that your investment gain value. In fact, whenever you invest, the investment company makes you sign that you know your investment is not FDIC insured and may lose value.

Actually, all sorts of people are to blame for this. Mortgage brokers/lenders pulled the wool over investor eyes. Brokers/lenders found and exploited loop holes in the system to get more people pseudo-qualified for loans.. Insurance companies(freddie mac, fannie mae, FHA, etc) knew these loop holes were being exploited, but didnt do anything to curtail them.. Brokers/lenders weren't very clear with buyers about terms of loans. Buyers weren't doing due dilligence, or paying attention to the loans they were taking out. Investors weren't paying attention to what they were buying... blah blah blah the loop is endless..

We are in an entitlement generation.. Most people seem to think they are entitled to own a home, a bunch of cars, and have 2.3 kids. You can have that stuff, but you have to EARN that stuff as well.

I saw a house that was worth 30k in great shape, and the seller owes 80k on it.

I have seen people with 335k ARM loans that are now at 10% interest. a 1% increase in a 150k loan is an extra $100 p/month in mtg payment.. This 335k loan guys' payment is now up over $600 p/month from when he got the loan in 2005.

I once made a 95k offer on a house, which was 5k below what the loan amount was. The bank turned me down, because the loan was federally insured via FHA. The banks hands were tied. They knew the house was only worth what I was offering, but that federal insurance was stopping them from accepting my offer. Why should they accept my 95k offer when they can get 100k from FHA. I bought the house 6 months later as a bank foreclosure for 85k(I was top offer at 85k). They probably spent 25-50k foreclosing on that house, and they lost an additional 10k over my initial offer.

8000 short sale listings in my local MLS(multiple listing service) last year, and only 300 of those sold... That tells you that they would rather sell it to the insurer than sell it for what it's worth...

These people don't need a bailout, they need some brains!

The majority - more than 50% - of the democrats voted for it. The majority - again more than 50% - of repubs voted against it.

Or do people really think of political parties as one big entity instead of several individuals?

I dont think I will feel much effect from any of this. I have enough money to buy anything I need and can save enough for most things I want. Not that I am anticipating it but Ive been poor before and most of us have been broke before and got by just fine.

My gf was freaking out about the market drop until I asked her how much stock she owns - none

Instead of the bail out, take that $700bl and split it up between every tax paying American. I think getting enough money to keep your house from going into foreclosure, pay off medical bills, go to college etc. would be a much better "economic stimulus" than a $300 check.

you wrote

"If you’re young and you “save for a rainy day,” you’re likely to be affected as your savings tend to be in more high risk assets such as domestic and international stocks."

No I think most peoples savings are in SAVINGS accounts.

The money you are talking about is investments, which is quite a different matter.

Over the last 15 years I have seeen people think themselves awfully clever for putting their superannuation to "work" in the market.

Not a one of them has a pot to p*ss in now.

The market ate all their pensions despit, but more likely because, they were being administered by get rich quick financial industry simpletons who were at no point interested in anything besides feathering their own nests.

I am debt free with money in the bank, the only way the CC will affect me is if all the folks in the world suddenly stop buying Video games.

As for the bail out...I'm glad it didn't happen, as the Reps were just going to hand over the money to the bum clowns of wall street who were goig to administer them with that now well recognised ability of theirs.

Oh and charge you for the privelidge.

Also the money would never have been paid back. They'd have just fouled the process in the courts for a decade or so until they got the right puppet in the White house who would cancel the debt.

Don't think so? 25 years in court and Exxon have been absolved of their debt over the fines for the Valdez.

Ride it out. A 7% drop doesn't mean very much in the long haul.

Ah well, it's only money and we can't touch it for 15 years anyway.

For my 19 and 23 yo's sake, though, I'm glad the bailout failed. And it's almost worth it to see the smug bastards on Wall Street suffer.

Still, hard to watch our retirement savings all going to hell. Makes me sad we've actually lived within our means and bothered to save and invest. Should've just spent all the money on stuff we didn't need like everyone else, I guess. ;^)

"We’re on the susso now,

We can’t afford a cow,

We live in a tent,

We pay no rent,

We’re on the susso now."

That seems to be the problem with the passage of the bill: regular people are opposed to the bailout because they see it as a lifeline for Wall Street and not Main Street.

@Fernando - "You are not feeling affected now because everything that goes on at wall street doesnt affect us emmidiately. We are barely feeling the effects of the beggining of when the wallstreet started suffering months ago. unfortunetly we are only in the beginning of recession."

I don't think so. The economy has been pretty bad - the collapse of the housing market was felt pretty immediately by regular people. It has finally caught up with Wall Street after a few months.

On the other hand, I'm worried about the job market in a few years. I'm in college studying for a job in computers and the last thing I need is to have to find a job in a poor job market. While I could freelance to keep afloat, it delays my future monetary plans by quite a bit. Also, I have to take out loans every year to pay for school (that money I took out of those stocks already went to pay for school - go figure) and, with my bad credit (I am also disabled, so the inability to work really hampers my credit power) it could be impossible to find a loan. I'll have to wait and see what happens. Hopefully they'll straighten this out before I'm out of school, but if not, I'll be living with my family for a little while longer.

Personally, this crisis is having a measurable effect on my career goals. I am fortunate enough to have scholarship offers to several law schools. As of a few months ago, I was relatively convinced that I wanted to turn down these offers and pursue a career in the creative arts. Now...I just don't think I can justify that. I hope to still pursue the arts during my spare time, and who knows where the future will take me, but that law degree from a top school will be more of a commodity in an unstable economic climate. Ultimately it will be more valuable for my long term goal to support a wife and family, which supersedes any personal career goals I may have.

I'm a little disappointed, but I can live with my choice. The people who really need our sympathy and support are those who worked their whole lives, saved wisely, and never spent beyond their means, who are nevertheless seeing their retirement accounts and especially college saving funds for their kids being wiped out. Imagine working your whole life to be able to give your children better opportunities than you had, and then not being able to send them to college because the market has collapsed. This thing is real, and affecting real people in tragic ways. I don't think it is at the absolute breaking-point crisis level yet (though it might escalate to that if some plan to inject liquidity into the credit market and prevent a freeze is not enacted) but don't think this is just affecting greedy wall street execs and irresponsible people who took out risky subprime mortgages--even responsible people who did nothing wrong are being affected.

Plus we survived the internet bubble bursting around the same time as 9/11. There's too many safeguards now for the economy to collapse like in 1929. We might have a recession, but the economy will recover.

And now it is gone. Disgraceful. And trillions will now be lost in the credit markets, the stock market and in housing net worth.

Maybe the purists and puritans believe that this is right. But for everyone who has ever saved a dime and worked hard and invested in a home or a stock, this is a disaster of unimaginable proportions that it will take as long as the Great Depression did for us to get over.

http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html

However, just because you avert one bad decision doesn't mean that others aren't being made simultaneously. Regardless of the congressional decision not to give the Fed and the Treasury new authority, the Federal Reserve nevertheless used its current authority to add $630 billion to the world's money supply. In other words, people won't be paying for it consciously; they'll be paying for it through inflation:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a9MTZEgukPLY

@oezicomix: Hey, I'm a freelance artist too!

What’s the point in having time limits for voting when your going carry on for 10-15 minutes trying to force people who voted NO to change their mind.

USA needs to get their government in line.