So what's everyone think of this whole financial meltdown??

[sunfunbill]

I'm surprised no one has mentioned the whole economy thing going on right now. What does everyone think about it, and should we be bailing out the rich companies in order to get things going again?

What about how has it affected you personally? I see Wamu bank in Florida just folded. That was my bank up to 6 months ago. Now I don't want much money in my account anymore. Of course that should be no problem.

My take, it's everyone's fault. Sure, the banks loaned fast and free when they should have been more careful. But the people getting those loans knew damn well how over their head they were getting into but just did not care.

Everyone has this sense of entitlement. " I should get that big house cause I'm entitled to it". I deserve that big place and SUV, even if I can't really afford it. So now both parties are paying the price.

I think we really need a long spell of tough times so that people wake up and live within their means. The inflated prices will go down, and then any loans will be based on real, solid prices, not fake inflated ones.

It will hurt, but we need to do that, not just keep patching things and keep spending on credit. I learned that a while ago. I may be poor, but I own everything outright.

I feel lucky I am working at home. No gas to buy, hell I don't even need a car! My writing comes from people from other countries that are doing fine. Sales of sponsors also often come from overseas. So I guess adult webmasters are lucky.

What's your take on all this??

[Cozy Monica]

I think the only thing we need to worry about is that consumers will be tighter with their money, and more careful spending means less money on porn.

However, porn is based on an instinctual basic need.. sex... so I don't imagine sales will honestly go down much, if at all.

Maybe I'm being naive, but I'm not sure the economy is going to touch my personal life much at all. Other than the odd tank of gas and the increased price on food, I don't see too much going on.

[ikabodsbadgirl]

When I logged into my wamu accounts tonight it said "welcome to JP Morgan Chase!" They say nothing will change for now.

My cousin's wife and my sister in law's sister in law work at the corporate wamu offices in downtown Seattle. I don't know if they will be affected or not. Right now they might not even know. But I heard on the radio the CEO of Wamu will get 13 million in severance and his sign on bonus, and he's only worked there something like 12 days. Now how the hell do I get a job like that?

Right now I'm soliciting all the freelance writing work I can get. Higher gas and food prices make the budget tight at times. Plus this year there were school clothes and supplies for two. But overall we feel like we're doing okay, so are most of our neighbors.

I just thank God Al Gore invented the internet, because I can sit here in the toolies and write for someone across the globe, and get paid almost instantly. It's a good deal.

[Lana]

It really is scary. If you're into such things and look closely it's really fucking scary - for Americans.
The reason Canada (Monica and myself) and the rest of the Western world will only indirectly be affected by this - Americas doing and not our own governments is because the U.S. is the only truly capitalist country that believes in no regulation what's so ever.
In Canada and Europe the government has serious oversight over the financial markets to make sure this meltdown doesn't happen. It protects the people not the banks.
There is no way I can buy an investment property with less than 30% down and rightly so.
Our execs make 10 mil a year not 100.
The rich in America are richer than anybody at any other time but maybe the chickens are coming home to roost.
Unfortunately it comes at the expense of people like you and me.

[phuckbunny]

I think it's terrifying. It's way worse than it sounds and it sounds bad enough as it is. Everyone is going to be affected by this, not just the US. I wish I had more of a knowledge of market economics but I don't think the 'bailout' is going to do much.

As Bill said, people were and are living beyond their means, with the govt's encouragement. The housing market collapsed because the houses were indeed overpriced. Everyone on the lending side knew this but they continued to sell of the mortgages through securitization creating a giant house of cards, now the Fed is going to bail out these companies so they can keep lending and encouraging the same thing that got us into trouble in the first place. Bullshit.



Hopefully vice industries like porn won't be affected but who knows. Unless you own hard assets that usually stay stable during inflation and depression (gold, land, base metals, energy), you will be losing money.

[razor]

In Canada and Europe the government has serious oversight over the financial markets to make sure this meltdown doesn't happen. It protects the people not the banks.

European and UK banks are just as exposed to sub-prime as US banks eg) Northern Rock and UBS. In fact Ireland is already in a recession and the UK will follow soon.

Everyone thinks that the poor consumer/taxpayers need protection from the greedy investment bankers - these are the miserable fuckholes that borrowed more than they could afford and have now caused this meltdown.

If the US financial system meltdowns I guarantee you will feel it in Canada

[Hyballs]

Hi folks, I bank with "Money under the mattress" as well as a regular credit union. Which was OK when I was working full-time and doing cash jobs, wink wink, nudge nudge! But with no further deposits and regular withdrawals "Money under the mattress" is in financial difficulties and may not be abled to service customer future needs. Kinda like the U.S.A. banking system!

Thank goodness the credit union is secure with a federal depositor guarantee!

Seriously though the problem will be a slight blip on the radar "Down under". We as a country will ride out the upheaval in the U.S. The American people on the other hand will suffer. Especially if a near one trillion dollar package is approved by congress.

So the average citizen will be screwed by a system where your Federal Reserve is part of a banking group owned by the privileged few and not the people.

Your screwed cos you have to help pay taxes and interest to said banking group owned by the privileged few.

And your screwed because you have a huge foreign debt to China.

Plus there is the obligatory job cuts and business closures.

Inflationary fuel prices.

Should I stop now before I make you all cry???

[Mr. Lovepants]

My prediction is; the value of the dollar will plummet.

And that's going to affect all of us

[Cozy Monica]

I don't know Lana where you are, but here where I am in Canada we had many mortgages offered at five percent down, and even some with zero down for awhile.

However, they would still do a credit check, and most people could no longer get mortgages because even with a two income family and a 25% deposit, they didn't make enough according to the bank to cover what their mortgage would cost monthly. And a good thing too, that hopefully saved some people.

Unfortunately, those people would just head off to a more greedy lender with a much much higher interest rate, who then would hand them whatever mortgage they wanted.

So I think we have a similar situation here, just not quite as bad, when it comes to the mortgages.

AND, I really do believe that Canada's economy will be affected by the situation in the U.S.

But, I'm not so sure it's going to be the crazy meltdown everyone is predicting.

[Lana]

I don't know Lana where you are, but here where I am in Canada we had many mortgages offered at five percent down, and even some with zero down for awhile.

Of course you can. But only for your principal residence. If you want to buy an investment property you need at least 30% down.
The vast amount of default mortgages in the U.S. are people who picked up investment properties with nothing down hoping the market would go up and flip. Since they put nothing down they can walk away with only their credit rating beat up.
The possible meltdown in the U.S. is going to affect us and the rest of the world for sure but not as much as the U.S. because investment properties are much harder to get.
And like you said, if you're only putting 5% down on your own home you must have a stellar credit rating and solid employment that shows income above 70% of your mortgage.
Also if you don't have 25% down on your principal residence you have to buy CMHC (Canadian Mortgage and Housing Commission) insurance to safeguard against default which is 3.5% of home value.
So this 0 to 5% down here is a bit of a misnomer.
The U.S. meltdown will only affect us is trade and flow of money. You won't see people put out of their homes because we're already protected - somewhat.

[mynameisjim]

The problem is there is no such thing as a free market anymore.

All the people responsible for the current financial "meltdown" made a crazy amount of money in the last five years. There is no incentive to do anything legitimately and no punishment for completely running your company and your country into the ground.

I've been saying this for a while but from here on out you are going to see boom after bust after boom after bust. The money will go into one sector, suck out all the real value, leave it totally empty, then move on to the next thing and do it all over again.

It's like some form of super capitalism and the people at the top have realized you can make money by doing things that aren't even remotely business related. For example, all this bad debt is from these insanely complex investment derivatives that made a shitload of money, but in the end nobody even knew what they were worth, and they still don't. It's not business, it's not investing, it's just manipulation.

My favorite part is how they try to blame regular individuals who took out loans for more than they could afford. What a joke! The top .0009% of this country totally raped the average American and in the end, they got those same average Americans to blame each other for the fallout. Gotta love that.

But it's not the financial crisis that makes me mad, it's the fact that I still hear "experts" on TV talking about it like it's rooted in real business fundamentals somehow. It was nothing more than the biggest and most complex pyramid scheme ever. Everyone made a shitload of money until there was no more free stupid money pouring in. Then the whole scheme collapsed.

[phuckbunny]

I'm still trying to wrap my head around this but I think what you said, Jim about 'there's no such thing as a free market' is the key to understanding this. As far as I was able to get in reading about this, it's actually not the lack of regulation in the free market but the exact opposite which caused a lot of these problems, i.e. the govt should have no business in quasi state owned entities like Freddie Mac and Fannie Mae and that it's partly to the supposed confidence of being back by the govt that these worthless securities were able to sell so easily both on Wall St and overseas because of the supposed backing of the Fed, no?

But yeah it has nothing to do with anything remotely related to actual trading of something that has any worth.

One thing I don't understand is how the value of these junk packages increases the more it is traded off from one party to another.

[mynameisjim]

Originally posted by phuckbunny


One thing I don't understand is how the value of these junk packages increases the more it is traded off from one party to another.

Check out some information on derivatives.

The problem was, the financial companies got carried away and the derivatives based on these junk loans got so convoluted, nobody knew their real value. As long as money was pouring in, you could keep up the smoke screen, but when credit started tightening up, it all fell apart.

There will always be buyers for risk, but that risk needs to be accurately valued. When it can no longer be valued and measured, the buyers leave and someone gets left holding the bag.

[phuckbunny]

Hmm.... So okay, "Derivatives are financial instruments that allow investors to speculate on the future price of, for example, commodities or shares - without buying the underlying investment."

That's kind of what a hedge fund does, isn't it? Where you don't actually buy the shares.

But how is it that the number of times something changes hands increase its value? Is it just some kind of psychological mind fuck?

[porn punk]

I think get a hat.

When the fat ass rich pricks start jumping out of windows, you want to be protected.

[Boonestoons]

I'm totally surprised that the legislators turned down the package.

That does not look good for the banking infrastructure of the sinister groups like the Federal Reserve. Their time is up. There's so long you can fuck the stupid til even the stupid want some money.

We well may be witnessing the total restructuring wherein banking is more centralized amongst the citizenry instead of priviledged rich flunkies of foreign interest groups.

I think Hyballs is right. We'll survive because we have resources and a mindset for survival. If the U.S. fell down the world would collapse from the aftershock.

The mortgage crisis isn't as bad as the media makes it seem because less than 10% of all mortgages are in default, however that percentage has caused this much damage because of one thing, the biggest mistake we make and that's gambling on the future. Wall Street is and always has been gambling on the future and everyone is trying to fix the race.

[kiara]

I am somewhat worried about it, because working class or 'middle class"people will be the first to suffer. That is of course me and most of my family members, minus a couple of Uncles who are rich as hell and won't be affected much. i think this bailout plan may make lives harder for our kids and grandkids as America will be in a whole sh*tload of debt. I was kind of hoping to have a Social Security when I get old and when my kids get old and grandkids get old but the way the economy is going, it's going to run out even before they said a couple of years ago.

seriously though, I think it's going to get way worse before it gets better. People are going to struggle, more homeless people will be around, and you won't see as many smiling faces I can guarantee you that. How bad it gets is only something i can speculate about, because it could get far worse than I ever imagined.

[Cozy Monica]

While I agree the economic problems are a huge issue, I think people should take advantage of it as a time to re-think their lives. Do we really need houses as big as we have? Do we need SUVs? Do we need more than one television? Do we need television at all? Perhaps we don't need that cell phone? What about the second, third, fourth cars?

And with clothing, do we need brand name? Should we be spending our leisure time shopping as a hobby?

There are SO many things we buy and do that are completely unnecessary, that we do just to indulge our desire to own things, to have lots of toys, to gain instant satisfaction.

I think that a lot of people could live with a lot less and still be just fine.

[mynameisjim]

Originally posted by Cozy Monica
While I agree the economic problems are a huge issue, I think people should take advantage of it as a time to re-think their lives. Do we really need houses as big as we have? Do we need SUVs? Do we need more than one television? Do we need television at all? Perhaps we don't need that cell phone? What about the second, third, fourth cars?

And with clothing, do we need brand name? Should we be spending our leisure time shopping as a hobby?

There are SO many things we buy and do that are completely unnecessary, that we do just to indulge our desire to own things, to have lots of toys, to gain instant satisfaction.

I think that a lot of people could live with a lot less and still be just fine.

I agree, but so much of our economy is based on consumer spending that if people took your advice we would go into a depression.

But I've thought about what you said before. People talk about the middle class being "squeezed" and struggling, yet the middle class of today lives far better than they did when I was a kid and I come from a middle class background. For example...

Cars: When I was growing up, every family had ONE car and they kept it long after they paid it off. Now, nobody owns a car for more than a few years and often have 2 or 3. Many people I know never own a car for more than a year.

Houses: Every new middle class suburb that goes up has backyards so big you need a riding lawn mower to cut the grass. Nobody in the middle class lived like that when I was a kid. Not to mention every house has central air. Does anyone remember going to the movies in the summer just to stay cool?

Televisions: You use to have one TV in the whole house and it pretty much lasted forever. Now, every room has a TV and often new TVs are bought every couple of years. Not to mention spending several thousand dollars on a TV is considered normal.

Cell Phones: Every family member has a cell phone now.

Cable: Cable was rare when I was younger, now everybody has it.

Assorted monthly bills that were not around 20 years ago: Internet, Netflix, satellite radio, etc.

All those things add up.

I don't mean to sound like an old coot (I'm 33) but people have taken on way more bills than they did in the past.

Like you say Monica, if people lived like they did in 1980 they would have a ton of cash left over.

[sunfunbill]

I have to say that for most, people are confusing the "nice to have stuff" as "I have to have that" stuff. Everyone could be just as happy with half of what they have, they just don't know it.

I have not owned a fucking TV in 20 years, it's a total waste of time. I have all my possessions inside a van, and only taking up 2/3 of the van at that. The van is a 1996 model.

NOW, my best friend here in Vermont has a three story house, owns 4 rental houses, 68 acres of land and 7 autos. He's the same age as me.

All he does is run from morning to night. He's losing all his hair, has high blood pressure, has had 2 breakdowns, looks like he's 20 years older, and is in pain all the time.

All he does is complain about how he can't get anything done and has not had a vacation in 12 years. Me, I'm working on my dream of working online and my biggest problem is deciding where to move since I can go anywhere.

Which life sounds better? Always, always, life is always based on one thing I keep saying:

Everything is relative.

You get use to however you live, are doing, have, brought up and so on. Sometimes you need a big shakeup to see what your not seeing.