The coming financial crisis

[Wingspan]

[Cerevant]

I don't think this is the kind of stimulus Bush was hoping you would invest in...

An independent market-research firm, AIMRCo (Adult Internet Market Research Company), has discovered that many websites focused on adult or erotic material have experienced an upswing in sales in the recent weeks since checks have appeared in millions of Americans' mailboxes across the country.

[rjs246]

He's in no position to be picky about how people are spending their money. As long as it's getting spent he can claim success.

[Cerevant]

Actually, items of artificial scarcity (movies, music, software) have almost no resource demands and extremely limited employment impact.

[rjs246]

It's still money being pumped into the economy. Look I'm on record for disliking the whole economic stimulus, my point is that as long as that money is getting put back into the economy in some way Bush can and will claim success.

[Cerevant]

The flaw with that reasoning is the assumption that the money will continue to circulate in the economy and not get "stagnant".  Ways the money can stop:
1) Savings/Stock purchase
2) Paying debt
3) Foreign investment

If the money is spent on something that does not cost significant resources (physical or human) the money has to change hands again or fall into one of the above.  Every time money changes hands, the likelihood of one of these outcomes increases. 

[Diomedes]

There is no flaw in Rusty's reasoning.  Bush's stated intent for the money is that people spend it.  If people do that, he can claim success.  It's a matter of fact, not opinion.

Regarding how sound the chimp's plan is, that's a different question, and one which our miserably refreshing friend is not talking about.

[PoopyfaceMcGee]

The Dow dipped below 11k for the first time in 2 years today.  Good times.

[Seabiscuit36]

And Boom Goes the Dynamite

[PoopyfaceMcGee]

Anyone else find it funny that Chuck Schumer single-handedly pushed IndyMac over the edge?

LINK


His response is standard pass-the-buck bullshtein.  There are many banks out there with liquidity problems, but he specifically mentioned this bank, and people understandably rushed to get their money out.  Good times.

[Seabiscuit36]

It's hilarious, Everyone who had over 100k should be smart enought to withdraw their funds, yet he goes out and singles IndyMac out, and Poof, Bank Failure. 

Wachovia is in trouble too, that would be very interesting to see. 

[PoopyfaceMcGee]

Why would anyone put in over $100k at an FDIC-insured bank?  If you want to have that much in the bank, then spread it out over multiple banks to make sure it's all backed.  Derrrr.

Wachovia going down?  Yikes.

EDIT:  Just found this article on which bank will be next to fail.  Quote about Wachovia:

Wachovia Corp., the fourth-largest U.S. bank, fell 11 percent to $10.26, a 17-year low, after being cut to ``neutral'' from ``buy'' at UBS AG, which predicted a dividend reduction to 1 cent and the sale of $5 billion of common shares.

[Seabiscuit36]

Thats scary, though i know Uncle Ken will be dancing in the streets

[Seabiscuit36]

The only positive in my eye would be a new name for the Wachovia Center

Analyst warns on Wachovia amid more bank worries
2 hours ago

NEW YORK (AP) — The situation is increasingly bleak for Wachovia Corp. and the bank's mortgage portfolio will continue to lose value, "seriously jeopardizing" the company's ability to generate earnings, an influential analyst warned on Tuesday.
The latest note of caution came as the government moved to reassure people their money is safe in the nation's banks. Yet fears about the system persisted and financial shares were broadly lower Tuesday, signaling another tough day for the stock market.
Federal Reserve Chairman Ben Bernanke is scheduled to brief Congress Tuesday on the economy, which has been walloped by high energy prices and fallout from the housing slump and credit crunch. The testimony also comes amid a backdrop of rising oil prices and a slumping dollar, and as stock markets overseas tumble amid worries about the U.S. financial system.
Bernanke will also specifically address a rescue plan crafted over the weekend for mortgage financiers Fannie Mae and Freddie Mac, which hold or guarantee more than $5 trillion in mortgages — almost half of the nation's total.
On Monday, shares of U.S. banks and financial companies swooned on concern that the government plan to shore up Fannie and Freddie would not be enough to keep them from failing, which could undermine the U.S. and global financial system.
National City Corp. shares fell nearly 15 percent on rumors of financial trouble, even though it said it was experiencing no unusual activity. Washington Mutual Inc.'s shares fell 35 percent amid worries about whether it had enough cash to handle the mortgage market downturn. WaMu said that it did.
Depositors lined up outside IndyMac Bank branches on Monday to pull their cash out after the savings and loan's assets were seized by the Federal Deposit Insurance Corporation on Friday. It was the largest bank failure since the collapse of Continental Illinois in 1984. It is estimated it could cost the FDIC between $4 billion and $8 billion out of the agency's $53 billion insurance fund.
In Asia and Europe, lack of confidence in U.S. regulators' ability to contain the problems sent shares

[PhillyGirl]

Does he actually believe the shtein he spews?