Ahira's Hangar

So the government now controls mortgage firms and insurance firms? The same companies they regulate. And of course, they borrowed the money to lend to them too. Credit. It's gonna kill you guys.

--A

The Soviet Empire fell because of bad finances...

As of today you can throw about another trillion on top of that other mark.

Better than world wide economic chaos, recession, and depression, though...

I have a really bad feeling about possible upcoming infaltion, though.

Which is further going to impact home-owners...and any other debts...

--A

Yes.

A part of me really really really resents these government bail outs and buy outs to private firms.

They keep any profits, but tax payers get to pick up the tab for crazy and greedy out of control bad poor and crappy investments?

On the other hand, the government has pretty much admitted that the entire US banking system and financial system would have crashed if they were not doing these buy outs/bail outs - followed by the banking systems of who knows how many other countries since the economies of so many countries are so interconnected these days.

So as much as I resent the buy outs/bail outs, I would be bothered by a huge worldwide recession/depression a hell of a lot more.

What is happening to us personally right now as a family is a cash crunch. People owe my husband six figures right now...

They cannot pay him because they simply do not have any money.

So we do not have much money beyond my hospital salary, which makes things tight.

We actually have fairly big stashes of cash in CD's (for the kid's college funds, thank God I told the investment councilors I wanted that money in safe CD's rather than the stock funds they were pushing so hard back when my father passed away, as this big amount of cash came from his estate) and in money markets (my emergency stash from years of pinching every penny until it screamed and then saved in case one of us cannot work due to injury or illness) - but I do not want to touch any of that other than for their intended purposes.

The mess continues.

The US started out the year with five big Wall Street banks - which serviced/held other large companies, and which also controlled large investments divisions where people could have brokerage accounts.

gone altogether:
Bear Stearns - bankrupt
Lehman Brothers - bankrupt
Merrill Lynch - merged with Bank of America ( and was about to go bankrupt)

And now the last two are being forced to become regular banks, so that they can be watched by government regulators.

Investment banks no more:
Morgan Stanley (plus a Japanese company is buying a %20 stake)
Goldman Sachs

The government is still trying to come up with a bailout plan that both parties can approve. The Democrats are supposedly holding out for more protections for taxpayers.

And the entire system is still in danger of crashing down and takign the world economy with it, if nothing is done.

Incidentally, you can all thank Ronald Reagan for this. It is a part of his legacy. He was the one who popularized the "regulation of business = bad" mentality that has proven to be completely wrong in practice. Deregulating electricity in California turned out to be a royal mess. And today we see the results of not enough/not enforced enough regulation on large (multibillion/trillion dollar) investment firms.

Yes - a major British investment firm was forced to merge into Leeds last week, as it was about to fail over the subprime crap. And a lot of Japanese banks have taken big hits, too, from what I understand.

The economies of the developed countries - from North America to Europe to Oceana to Asia are all interconnected. If one huge economy - the US, Japan, Britain, Germany - goes - they will all follow suite to one degree or another.

On Black Sunday and Meltdown Monday economies from Australia to Russia to Japan to the US all took huge stockmarket hits.

We are not out of this yet.

I do like how Obama says that the G8 leaders have to work together on this - it might have started in the US, but it is screwing up everyone.

Personally, I've been holding off looking for a house since I got my inheritance, waiting for this damn bubble to burst. Another year or so and I should be ready...

--A