There goes the stock market

[Venture]

Nothing rubs in my lack of talent with complex numbers more then a stock market discussion. If I get the gist of what just happened today right; they cut rates on payments to free up more money into the economy, in hopes of influencing more spending on consumer behalf?

Prolly a dumb question for anyone who can follow along naturally, but some of us are the kind of people who get the "Find X" question so wrong, we might as well just have drawn a X on the triangle and moved on to the next question.

[octopus]

http://2600rochester.googlepages.com...findX-full.jpg

[Charla]

Essentially the whole thing is more a matter of group psychology than math, but yes, that's the basic idea. If the Federal Reserve (which is really a group of banks that agree to take orders from Mr. Bernanke) is willing to charge their usual customers less interest, then those customers can afford to charge their own customers less interest, and everyone involved can afford to throw more money at the stock market. But it's still far more useful to use the psychology of a poker game than to try to approach the situation with math.

[Xavier]

Bill Gates, its up to you to dump a few billion into the stock market and save us all.

----------------------------------------
- Inflation is going to kick us in the ass before long.

- Buying a house you can't possibly afford makes you a retard.

- Loaning money to someone to buy a house they can't possibly afford also makes you a retard.

The situation is very complex but thats pretty much my opinion in cliff notes.
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I know that there are a lot of factors involved in the economy, but Hillary should stand up, get a mic, and go, "this never happened with a Clinton in the White House!" And yes, I understand the credit goes to a lot of places, but yeah.

[Venture]

Someone needs to get that damned X a Tom-Tom already. Getting tired of having to find it.

[Xavier]

At some point people are going to realize that having trillions of dollars of debt isn't very healthy to an economy.

[Exoduso]

I know that there are a lot of factors involved in the economy, but Hillary should stand up, get a mic, and go, "this never happened with a Clinton in the White House!" And yes, I understand the credit goes to a lot of places, but yeah.

lol, she probably will too. >.<

[Xavier]

"Its the economy, stupid" wins elections.

[Shuemue]

Similar crash happened over here yesterday, it all settled back down apparently.

[skurlover]

I know that there are a lot of factors involved in the economy, but Hillary should stand up, get a mic, and go, "this never happened with a Clinton in the White House!" And yes, I understand the credit goes to a lot of places, but yeah.

Then she'll have to turn to her sleeping husband and ask him how to do it, she has been a coattail hanger from the get-go.

[SwampdonkeyPLD]

Bill Gates, its up to you to dump a few billion into the stock market and save us all.

----------------------------------------
- Inflation is going to kick us in the ass before long.

- Buying a house you can't possibly afford makes you a retard.

- The government forcing banks to Loan money to someone to buy a house they can't possibly afford makes politicians retards as well.

The situation is very complex but thats pretty much my opinion in cliff notes.
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I know that there are a lot of factors involved in the economy, but Hillary should stand up, get a mic, and go, "this never happened with a Clinton in the White House!" And yes, I understand the credit goes to a lot of places, but yeah.

Fixed. And yes Charla, I think the CRA is what I was referring to.

[Charla]

Oh hey, I just noticed that CRA thing is 30 years old. Why do you think it took so long before anyone heard the word subprime?

[evilbau]

I'll save my long-winded analysis but I will say that the most significant things to happen the last couple of days isn't the dropping of all the major index, but the Fed cutting rates again.

Oh boy, I know its necessary to get money moving again to achieve their coveted soft landing but this is too drastic. http://money.cnn.com/2008/01/22/news/ec ... /index.htm

[SwampdonkeyPLD]

Oh hey, I just noticed that CRA thing is 30 years old. Why do you think it took so long before anyone heard the word subprime?

I think one of the reasons is because a lot of the mortgages were adjustable rate mortgages. In the first year, some interest rates were only 3%, but as the rate adjusted upward they could no longer afford them. I would also guess the number of bad loans has increased as well. Another thing that happened is some states passed laws forbidding lending fees on these sub-prime mortgages. This meant banks could no longer cover themselves on these risky loans.

[Koga]

I know that there are a lot of factors involved in the economy, but Hillary should stand up, get a mic, and go, "this never happened with a Clinton in the White House!" And yes, I understand the credit goes to a lot of places, but yeah.

God, I would pay to see that on national TV.

[Charla]

Oh hey, I just noticed that CRA thing is 30 years old. Why do you think it took so long before anyone heard the word subprime?

I think one of the reasons is because a lot of the mortgages were adjustable rate mortgages. In the first year, some interest rates were only 3%, but as the rate adjusted upward they could no longer afford them. I would also guess the number of bad loans has increased as well. Another thing that happened is some states passed laws forbidding lending fees on these sub-prime mortgages. This meant banks could no longer cover themselves on these risky loans.

Well, I'm not sure what's going on here, but it seems to be a difference in who we believe. I listen to NPR, where they never mention the CRA, but instead blamelenders for making too many subprime loans, and underwriters for ignoring most of the risks of investing in securities with them. You appear to be listening/reading something else
(possibly something like this guy) which seems to be saying that lenders were all given a catch 22 when the Fed decided to enforce a 30-year-old law, and had to give a loan to everyone who asked for one, then charged highly adjustable rates to cover themselves, which resulted in a spike in foreclosures.

I don't believe that guy's narrative, partly because the wiki article on the 30-year-old law in question doesn't agree with his description of it, and partly because I trust NPR more than I trust his assertion that the "mainstream media" is ignoring the facts.

[wyrmtung]

I'm having a hard time following, so does a 6 year (and counting) war help or hurt the economy?

Is it too early to add Bush Jr to Mt Rushmore? He's so awesome.

[Norelco]

I know that there are a lot of factors involved in the economy, but Hillary should stand up, get a mic, and go, "this never happened with a Clinton in the White House!" And yes, I understand the credit goes to a lot of places, but yeah.

God, I would pay to see that on national TV.

I just LOL'd

[Howard Roark]

Fiscal irresponsibilty is finally biting the economy in the ass, hard.
(Namely, the entire loan/credit industry- again.)

Fed looks like it's going to 1-2 punch the lending rates with the pre-meeting cut done now and another 1/2 point later.

Plunge should veer off some later today, though. Think there's enough confidence in the market that people are going to bargain hunt...and besides, this is intertia built up from the day off for the market yesterday- when the world stock markets dropped off sharply.

(The bad scenario will be if the two keep feeding off each other and we get to see a huge crash.)

Personally, I see this as what happens when you feed all the tax breaks to the corporations and rich folks. It's the middle and lower class people going down the tubes that's fueling this collapse.

Anyone missing Bill Clinton's presidency lately?

i hear china has money to lend

is it poor taste to say you had a crappy president on his way out? i mean, i told you so?

funny thing is i guarantee if he could get elected for a 3rd term he would

something something got what you deserved STOP VOTING FOR BRAND NAME PRESIDENTS

[SwampdonkeyPLD]

Oh hey, I just noticed that CRA thing is 30 years old. Why do you think it took so long before anyone heard the word subprime?

I think one of the reasons is because a lot of the mortgages were adjustable rate mortgages. In the first year, some interest rates were only 3%, but as the rate adjusted upward they could no longer afford them. I would also guess the number of bad loans has increased as well. Another thing that happened is some states passed laws forbidding lending fees on these sub-prime mortgages. This meant banks could no longer cover themselves on these risky loans.

Well, I'm not sure what's going on here, but it seems to be a difference in who we believe. I listen to NPR, where they never mention the CRA, but instead blamelenders for making too many subprime loans, and underwriters for ignoring most of the risks of investing in securities with them. You appear to be listening/reading something else
(possibly something like this guy) which seems to be saying that lenders were all given a catch 22 when the Fed decided to enforce a 30-year-old law, and had to give a loan to everyone who asked for one, then charged highly adjustable rates to cover themselves, which resulted in a spike in foreclosures.

I don't believe that guy's narrative, partly because the wiki article on the 30-year-old law in question doesn't agree with his description of it, and partly because I trust NPR more than I trust his assertion that the "mainstream media" is ignoring the facts.

Well, if you go by the wiki article it says the purpose was of the CRA was to stop redlining. Banks therefore had to lend to people they otherwise wouldn't. Banks are also assessed and receive a CRA score. If they get a shitty score then all of the following are affected:

(A) a charter for a national bank or Federal savings and loan association;
(B) deposit insurance in connection with a newly chartered State bank, savings bank, savings and loan association or similar institution;
(C) the establishment of a domestic branch or other facility with the ability to accept deposits of a regulated financial institution;
(D) the relocation of the home office or a branch office of a regulated financial institution;
(E) the merger or consolidation with, or the acquisition of the assets, or the assumption of the liabilities of a regulated financial institution requiring approval under section 18(c) of the Federal Deposit Insurance Act or under regulations issued under the authority of title IV of the National Housing Act; or
(F) the acquisition of shares in, or the assets of, a regulated financial institution requiring approval under section 3 of the Bank Holding Company Act of 1956 or section 408(e) of the National Housing Act.

I also just found this funny. "...the amount of the loss incurred in connection with such activity may be a factor in determining whether the depository institution is meeting the credit needs of the institution's community for purposes of this title." Those banks sure are helping the community!