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What we are witnessing folks is the entire financial system in this country unraveling right before our eyes. I personally worked in the financial field for over 15 years... and I will tell you that I know for a fact that this system is a house of cards. Virtually every company trading on wall street is OVER VALUED...Every stock that trades has something that we in the industry call a P/E ratio which stands for price to earnings ratio. This is basically the price in which the stock is trading at relative to it's earnings per share. For example if a stock is trading at $20 per share and earns a profit of $2 per share than the ratio is 20/2 or put another way the investor is buying a company that is trading at 10 TIMES it's earnings.

That's basically like someone coming to you saying hey I got this idea that can make us a profit of 10 bucks and all I need from you is to invest $100 in the idea..oh and by the way there is a very good chance you could lose ALL your money. It sounds crazy when put in those terms I know... yet that is what millions of Americans are doing when they invest in the stock market where many if not all of the companies are trading at 10, 15, 20 or 25 times earnings and some are even trading with no earnings at all or even taking loses.

So this is not just limited to the financial sector...over valuation is a problem endemic to the entire U.S. economy...The problem for this country now is that the jig is up and foreign investor confidence is diminishing FAST and the U.S. is no longer the only game in town. So many investors are shifting their funds to Europe, Asia and even emerging markets like South America and parts of AFRICA.

Couple all this with the fact that this country is saddled with TRILLIONS of dollars in debt that it will NEVER be able to pay off and the shocking TRUTH starts to emerge... and that is this country is BROKE...The only thing holding this country up right now is it's mystique of being the mighty U.S.A.....and for now foreign money still has a little confidence in that. However, that mystique is eroding fast as the TRUTH about this country's financial weakness is becoming EXPOSED.

If you think that Lehman Brothers filing bankruptcy or Merrill Lynch needing a buyout (unthinkable 5 years ago) is bad just keep on living...you ain't seen NOTHING yet....
"In a world where lies have become accepted as fact..The truth when finally heard burns like a flame of fire" "It is irrational to want that which is not God's will, so attune thyself with thy inner Nature and live happily."
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good info LD,

I've observed a couple of things and wondered if you could address them.

1. When Indymac bank failed, i noticed there were googobs of financial experts on tv and radio telling people they shouldn't worry, it's normal for some small banks to fail, this isn't out of the ordinary, and don't fret because their accounts are insured up to $100K, but what if multiple banks fail? Will accounts still be F.D.I.C. insured? I've heard Wachovia and Washington Mutual are teetering.

2. The housing/credit crunch seems to be spiraling on, and Freddie/Fannie were rescued but the PEOPLE continue to lose their homes. Why is there no effort to stop the people from losing their homes, but there is every effort to bail out lenders?

3. Bail-outs: Why is it that private for profit entities are being bailed out by the taxpayers and how many more private for profit entities will expect the taxpayers (the ones losing their jobs and homes) to bail them out?

4. Who is supposed to be protecting the little guy?
http://news.yahoo.com/s/ap/financial_meltdown

Thank you LD, I've been monitoring this for some time now... What can be done to protect ourselves?

-------------------------------------------------------------------------------------------


Wall Street awakes to 2 storied firms gone By JOE BEL BRUNO, CHRISTOPHER S. RUGABER and MARTIN CRUTSINGER, AP Business Writers
56 minutes ago

http://news.yahoo.com/s/ap/financial_meltdown



When Wall Street woke up Monday morning, two more of its storied firms had vanished.

Lehman Brothers, burdened by $60 billion in soured real-estate holdings, said it is filing for Chapter 11 bankruptcy after attempts to rescue the 158-year-old firm failed.

Bank of America Corp. said it is snapping up Merrill Lynch & Co. Inc. in an $50 billion all-stock transaction.

The demise of the independent Wall Street institutions came as shock waves from the 14-month-old credit crisis roiled the U.S. financial system six months after the collapse of Bear Stearns.

The world's largest insurance company, American International Group Inc., also was forced into a restructuring.

And a global consortium of banks, working with government officials in New York, announced a $70 billion pool of funds to lend to troubled financial companies.

The aim, according to participants who spoke to The Associated Press, was to prevent a worldwide panic on stock and other financial exchanges.

Ten banks "” Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley and UBS "” each agreed to provide $7 billion "to help enhance liquidity and mitigate the unprecedented volatility and other challenges affecting global equity and debt markets."

The Federal Reserve also chipped in with more largesse in its emergency lending program for investment banks. The central bank announced late Sunday that it was broadening the types of collateral that financial institutions can use to obtain loans from the Fed.

Federal Reserve Chairman Ben Bernanke said the discussions had been aimed at identifying "potential market vulnerabilities in the wake of an unwinding of a major financial institution and to consider appropriate official sector and private sector responses."

Futures pegged to the Dow Jones industrial average fell more than 250 points in electronic trading Sunday evening, pointing to a sharply lower open for the blue chip index Monday morning. Asian stock markets also tumbled, with India's Sensex sinking more than 5 percent. Japan and Hong Kong were closed for holidays.

The stunning weekend developments took place as voters, who rank the economy as their top concern, prepare to elect a new president in seven weeks. It likely will spur a much greater focus by presidential candidates "” Republican John McCain and Democrat Barack Obama "” and members of Congress on the need for stricter financial regulation.

Samuel Hayes, finance professor emeritus at Harvard Business School, said the Bush administration may get a lot of blame for the situation, which could benefit Obama.

"Just the psychological impact of this kind of failure is going to be significant," he said. "It will color people's feelings about their well-being and the integrity of the financial system."

Lehman Brothers' announcement that it is filing for bankruptcy came after all potential buyers walked away. Potential suitors were spooked by the U.S. Treasury's refusal to provide any takeover aid, as it had done six months ago when Bear Stearns faltered and earlier this month when it seized Fannie Mae and Freddie Mac.

Employees emerging from Lehman's headquarters near the heart of Times Square Sunday night carried boxes, tote bags and duffel bags, rolling suitcases, framed artwork and spare umbrellas. Many were emblazoned with the Lehman Brothers name.

TV trucks lined Seventh Avenue opposite the building, while barricades at the building's main entrance attempted to keep workers and onlookers from gumming up the steady flow of pedestrians flowing in and out of Times Square.

Some workers had moist eyes while a few others wept and shared hugs. Most who left the building quietly declined interviews.

People snapped pictures with cameras and their phones. Observers pressed up against a police barricade drew the ire of one man who emerged from the building and shouted: "Are you enjoying watching this? You think this is funny?"

Merrill Lynch, another investment bank laid low by the crisis that was triggered by rising mortgage defaults and plunging home values in the U.S., agreed to be acquired by Bank of America for 0.8595 shares of Bank of America common stock for each Merrill Lynch common share.

That values Merrill at $29 a share, a 70 percent premium over the brokerage's Friday closing price of $17.05, but well below what Merrill was worth at its peak in early 2007, when its shares traded above $98.

Charlotte, N.C.,-based Bank of America has the most deposits of any U.S. bank, while Merrill Lynch is the world's largest brokerage. A combination of the two would create a global financial giant to rival Citigroup Inc., the biggest U.S. bank in terms of assets.

Strategically, most industry analysts say it's a good fit. If the deal goes according to plan, Bank of America will be able to offer Merrill's retail brokerage services to its huge customer base. There is not a great deal of overlap between the two companies "” Bank of America does have an investment bank already, but it has never been terribly strong.

Where there is duplication, however, the combination of the two companies could result in more layoffs. Both Merrill and Bank of America have already cut thousands of investment banking jobs over the past year.

The deal would not come without risks, however. Merrill Lynch, like many of its Wall Street peers, has been struggling with tight credit markets and billions of dollars in assets tied to mortgages that have plunged in value. Merrill has reported four straight quarterly losses.

Bank of America's own finances are far from robust. As consumer credit deteriorates, the bank has seen its profits decline, and the company is still in the midst of absorbing the embattled mortgage lender Countrywide Financial, which it acquired in January.

Insurer AIG, hit hard by deterioration in the credit markets, said Sunday it is reviewing its operations and discussing possible options with outside parties to improve its business after a week when its stock dropped 45 percent amid concerns about the company's financial underpinnings. It was working with New York Insurance Superintendent Eric Dinallo and a representative of the governor's office through the weekend to craft a solution that protects policyholders, according to Dinallo's spokesman David Neustadt.

"It's clear we're one step away from a financial meltdown," said Nouriel Roubini, chairman of the consulting firm RGE Monitor.

The meetings that began Friday night were a who's who of financial heavyweights: Treasury Secretary Hank Paulson, Timothy Geithner, president of the New York Fed, Securities and Exchange Commission Chairman Christopher Cox, and a host of CEOs, including Vikram Pandit of Citigroup Inc., Jamie Dimon of JPMorgan Chase & Co., John Mack of Morgan Stanley, Lloyd Blankfein of Goldman Sachs Group Inc., and Merrill Lynch & Co.'s John Thain.

For all their efforts, Lehman appeared ready to file for bankruptcy.

The end of Lehman may not stop the financial crisis that has gripped Wall Street for months, analysts said. More investment banks could disappear soon.

The independent broker-dealers "are going the way of the dodo bird," said Bert Ely, an Alexandria, Va.,-based banking consultant.

That's partly because some of the firms, particularly Merrill, made bad bets on real estate. But several analysts said that investment companies will need the deep pockets of commercial banks to survive the next few years.

On Sunday, there was also an emergency trading session being held at the International Swaps and Derivatives Association to "reduce risk associated with a potential Lehman Brothers Holdings Inc. bankruptcy." The ISDA, which arranges trades for derivatives, said it was allowing customers to make trades and unwind positions linked to Lehman.

Roubini said it's difficult to accurately gauge the health of companies like Merrill because their financial health depends on how they value complex securities. As a result, their finances aren't very transparent, he said.

That can lead to a loss of confidence in the financial markets, he said, which can overwhelm an investment bank even if it is financially healthy by some measures.

"Once you lose confidence, the fundamentals matter less," he said.

The common denominator of the financial crisis, analysts said, is the bursting of the housing bubble. Home prices have dropped on average 25 percent so far. Roubini predicted they could drop another 15 percent.

The crisis has begun to slow the broader economy as banks make fewer loans and consumers have begun cutting spending. Many economists are now forecasting that the economy could slip into recession by the end of this year and early next year.

That, in turn, could cause additional losses for commercial banks on credit cards, auto loans and student loans.

The Fed is widely expected to keep interest rates steady at 2 percent, below inflation, when it meets Tuesday. It was possible, however, that the central bank might decide in coming weeks to cut rates if such a move is seen as needed to calm turbulent financial markets.

The International Monetary Fund predicted earlier this year that total losses from the credit crisis could reach almost $1 trillion. So far, banks have only taken about $350 billion in losses.

Commercial banks are also starting to feel the pinch. Eleven have closed so far this year, including Pasadena, Calif.-based IndyMac Bank, which had $32 billion in assets and $19 billion in deposits.

Christopher Whalen, managing director of Institutional Risk Analytics, a research firm, predicts that approximately 110 banks with $850 billion in assets could close by next July. That's out of 8,400 federally insured institutions, he said, which together hold $13 trillion in assets.

Individual customers are starting to get nervous about the financial health of their banks for the first time in generations, he said. Whalen's firm analyzes the safety and soundness of banks for business clients, but began receiving inquiries from individuals in the past two months for the first time, he said.

"If we don't get ahead of this, we are going to face a run on the retail banks by election day," he said.

___

AP Business Writers Madlen Read, Tim Paradis and Stephen Bernard in New York, Martin Crutsinger in Washington, Ieva Augstums in Charlotte and Michael Liedtke in San Francisco contributed to this report.
btw: This is the economy that Obama will inherit if he wins the election...

This is the economy ANY president will inherit..

What can be done?

and... America is not the only one affected:

America is not the only one:

-------------------------------------------------------------------------------

Learning English - Words in the News

12 September, 2008 - Published 09:14 GMT

European recession

http://www.bbc.co.uk/worldservice/learningenglish/newsenglish/witn/...



The European Commission says three of its biggest economies, Britain, Germany and Spain, will drift into recession before the year is out. The Commission has also said growth throughout the eurozone will be below its previous forecast. Rodney Smith reports:


In a gloomy prognosis on economic prospects for the 15 member eurozone, the European Commission's latest interim forecast indicates that overall growth will struggle to reach just over 1%. 1.3% in fact this year. However in the detail, it thinks the eurozone is going through the worst of the storm right now and may show a very modest improvement from October through to December.

This does mean that the eurozone as a whole could be spared recession, but the Commission also reports that the individual economies of some of the biggest members won't be so lucky. Germany and Spain are expected to tip into recession.

And so is Britain, but it is not a member of the eurozone. This reinforces a recent forecast by the OECD that the British economy is particularly weak.

Rodney Smith, BBC
19
Yep! Looking like a revolution is getting closer every day!

When Savage, O'Reilly, Buchannan, Hannity and the rest said, "the world needs white males", was this included in their thinking?
If this is part of their heritage, they can have it. 19

If McCain wins, will he start another war to distract from the real issues?

If Obama wins does he have enough savvy to get us out of this jam?

This just keeps getting better and better
More (excerpt):

http://www.cnbc.com/id/26710362

Wilbur Ross: Possibly a Thousand Banks Will Close
WILBUR ROSS, LEHMAN BROTHERS, FINANCIAL INSTITUTIONS, MERRILL LYNCH, BANK OF AMERICA
By CNBC.comCNBC.com
| 15 Sep 2008 | 02:12 AM ET
In an exclusive interview with CNBC.com, Wilbur Ross, chairman and CEO of WL Ross & Co., says he sees possibly as many as a thousand bank closures in the coming months. And this will create opportunities for investors.
On a positive note there may be a return of manufacturing jobs.. on the downside, an increase in racism and segregation as communities become more unified and xenophobic in the midst of struggle...

On a positive note.. white collar engineering/computer/basic accounting jobs may be plentiful overseas... thus leading to more expatriats.. who develop racial sensitivities as they encounter the world abroad... on the downside, greater fighting over resources and devalued currency will lead to greater military recruitment...
Funny you mentioned Bank Of America. They will be gone by Novemeber. Let me tell you why. Last week my government Credit Card, which all used to be issued by Bank of America, has been replaced by CitiBank Financial. Even the federal government has scaled back on doing business with BofA!
Also another issue that I wanted to take note of, why the switching of retirements and pensions to be governed by the private sector was a horrifically bad idea. Proof of which we have now.
Listening to Secretary of the Treasury Paulson during a news conference, he is saying that the banking system is archaic and major changes are needed. He also said in the same breath that the banking system is a safe & sound one.

Money at banks FDIC approved up to $100,000? Where will the FDIC gets their money from to cover potential insured losses when the FDIC is borrowing money themselves?

He states that the root of the problem is the housing crisis and correction needed to turn the corner. Idiotic response. Who in the fuck regulated/approved these bad mortgage loans? The same assholes who are now running for cover.

Also, people take some of the blame; buying a house THEY KNEW that they can't fiscally afford with a non-fixed mortgage rate.

Also, borrowing against their mortgages to do expensive unneeded home improvements (the larger kitchen, bathroom, additional rooms, landscaping, new basements, pool etc). People didn't need any of that bullshit, they just wanted it, a "keeping up with the joneses" thing. So when you look back, put some blame on yourself. No one put a gun to your head and you knew that you did not have the money to pay it back when interest rate rose. You did not have to go to the bank.

Like my Grandpa used to say "You just long eyed".

Also, along with those newly created cable home improvement shows that suck people in and gave people that "I'm more than I'm worth but can't afford it" false sense of hope in improving their mundane lives. nono

How many years will that "correction" take and where is the money to do that comes from??? Just like his White House boss, Paulson doesn't have a clue but Paulson is rich, he will be ok.

Yeah right. This guy is so full of shit! He is just another "friend hired by Bush". He sounds like FEMA's "Brownie" during Hurricane Katrina.

But no mention and attention of the real problem: not the store but the people running the store. Corporate political lies, corruption, greed and overall stupidity of these institutions who work soley for the large investor(s) and entities to ensure rich people get richer and whatever trickles down to the masses please be there to catch it created by their hero & mentor, Ronald Reagan bang

The next President better have his shit together.
Last edited {1}
quote:
Originally posted by negrospiritual:
good info LD,

I've observed a couple of things and wondered if you could address them.

1. When Indymac bank failed, i noticed there were googobs of financial experts on tv and radio telling people they shouldn't worry, it's normal for some small banks to fail, this isn't out of the ordinary, and don't fret because their accounts are insured up to $100K, but what if multiple banks fail? Will accounts still be F.D.I.C. insured? I've heard Wachovia and Washington Mutual are teetering.

2. The housing/credit crunch seems to be spiraling on, and Freddie/Fannie were rescued but the PEOPLE continue to lose their homes. Why is there no effort to stop the people from losing their homes, but there is every effort to bail out lenders?

3. Bail-outs: Why is it that private for profit entities are being bailed out by the taxpayers and how many more private for profit entities will expect the taxpayers (the ones losing their jobs and homes) to bail them out?

4. Who is supposed to be protecting the little guy?


1. Well actually the "financial experts" on tv and radio are only performing their role in this kabuki play... which is to keep the public pacified and calm fears. That's the reason behind when Senator Charles Schumer blew the whistle on the financial weakness of Indymac (which precipitated the run on the bank) he was chided in the press because he 'broke the code' of silence. Sure smaller or regional banks may fail from time to time..however what's plaguing the U.S. is a SYSTEMIC problem and there will certainly be even more failures... this is just the tip of the iceberg. Now with regard to F.D.I.C. insurance... it is true that accounts are secured up to $100k...however the next question should be then just how solvent is the F.D.I.C. really? If other institutions ran by this Federal Government are any indication then I would say...not very. Consider this.. the F.D.I.C. Depositor Insurance Fund currently holds 45.2 billion which equates to only about 1.01% of all the deposits covered by the fund. In other words, the fund holds 1 penny for every dollar it's supposed to protect. So what happens if too many banks start to fail simultaneously?...you do the math.

2. Because the PEOPLE are viewed simply as collateral damage....just like in war they are expendable. The reason that lenders and other institutions are being saved is because if they are not then the whole house of cards comes crashing down all at once...There is a LOT at stake here and they are simply trying to put band-aids on the cracks in the dike to stall for time...but that time is running out.

3. Well, contrary to popular belief ALL your tax money goes into private hands anyway...I know this is hard to believe but it's true...I will go a little deeper into this when I respond to Khalliqa but the money we pay in taxes goes into the hands of private bankers in order to pay the interest on the DEBT that the Federal Government owes them.

4.God...and the common sense he gave you to make prudent decisions...don't look for protection from this system..you won't find it.
quote:
Originally posted by Khalliqa:
Thank you LD, I've been monitoring this for some time now... What can be done to protect ourselves?



"What can be done to protect ourselves?" Your question is twofold whether you realize it or not...on the one hand it can be asked from an individualistic POV..meaning what do we do in our everyday PERSONAL lives regarding our finances. The other way it can be interpreted is as what can we do to protect ourselves COLLECTIVELY...I'm going to touch on both of these.

For starters it is imperative before I go any further that I must reveal to you a TRUTH that most people are not aware of nor have they considered...which is how money is created in this country. Now on the surface this may appear to be a pretty simple question and your answer may be "The Government" or "The U.S. Mint"... this is NOT the whole truth however. Have you ever wondered why is it that there is so much DEBT in this country? Whether it be the Federal or local governments, Corporate or personal households everyone seems to be in debt all at once. How can this be?...How can that much money even be in existence?...well the short answer is that it's NOT. The real way money is created in this country is through the issuance of CREDIT this is done by banks literally creating money OUT OF THIN AIR in the form of loans, credit cards, etc..

I know the next question becomes how can this be?...how is it that they can get away with that?...Well for starters the Federal Reserve act of 1913 once enacted... transfered the power of the Government to control it's own money supply to the hands of PRIVATE international bankers under the guise of the "Federal" Reserve... which is NOT a government agency at all. This creates a situation that basically allows this consortium of international bankers to hold both the Government and public HOSTAGE....this whole thing is a bank heist in reverse. All the money that the Goverment uses in doing everything from building infrastructure to fighting wars is LOANED to it at INTEREST. The money that is snatched from citizen's in the form of taxes is only for payment of the interest on these loans. If you notice for the most part it is the big BANKS that are swallowing up these failing institutions this is because THEY control the money supply and are able to do so...they are simply consolidating their power. All the power and control over this fiat monetary system is in the hands of a cabal of power crazy demonically inspired men looking to fiancially enslave the world...sounds far fetched right?...but it's what's REALLY going on...

As I alluded to in my response to NS...we are fast approaching the time when ones faith will be tested...There is an epic struggle going on right now between the forces of Good and Evil for the hearts, minds and souls of men. I'm not trying to sound all mystical and whatnot.... but people have been trained to think much to secular so we often ignor just how much the physical and spiritual world are intertwined. To your question regarding what can we do on an individual basis...I would say live below your means...I'm not familar with your financial situation currently but if you are able to eliminate DEBT and shave any unecessary expeditures from your budget do so. I've been on these sites on and off for over 5 years giving advice (specifically to Black folks) on how to prepare for the worst. I don't know how many have heeded my advice over the years. What I do know is that now those options I presented are running out...when the getting was good in the realestate market I advocated a lot off line for people to take advantage of it in a prudent way. I for one was able to get in and out before the bubble popped... because I knew that it would just like the dot com boom in the early 2000's.

Subsequent to this post I will post more things that I believe one can do on an individual basis...however like I said other than being frugal and living below your means there is just too much uncertainty right now for me to make any strong recommendations regarding where one can safely place money. I have money still in realestate... however that's because I got in early and still have TONS of equity....the market right now still seems volitale though...I also have money diversified in oversees markets...and I own some hard foreign currency as well....if you are able to I suggest you do the same.

Now regarding what Blacks can do as a whole.... I would say we REALLY need to start thinking outside this BOX we've been in for nearly 400 years. I hope you guys don't think I'm being facetious or that I'm just on some 'hate YT' stuff when I'm talking about Black separation. I'm speaking along the lines of Blacks PROTECTING ourselves from what I know will be the eventual COLLASPE of this entire system. Every other ethnic group in this country has a place to go when this happens...Blacks however have placed far too much of their hopes and dreams in this great plantation called the U.S. of A...so what happens if the plantation ceases to exist?.... then what?...you are then finally FREE but what will you do with this freedom?
quote:
Originally posted by ocatchings:
19
Yep! Looking like a revolution is getting closer every day!

When Savage, O'Reilly, Buchannan, Hannity and the rest said, "the world needs white males", was this included in their thinking?
If this is part of their heritage, they can have it. 19

If McCain wins, will he start another war to distract from the real issues?

If Obama wins does he have enough savvy to get us out of this jam?

This just keeps getting better and better


It really doesn't matter who gets in..they're just different sides of the same coin....a coin that is losing more and more of it's value everyday.....
Well...so there has been another corporate welfare case "bail out" of AIG to bad the market doesn't like the idea of a "socialised insurance company"...I hope you guys are asking yourself with the government being in so much debt itself just how is it able to come to the rescue of all these corporate dead beats?

Oh and NS and Khalliqa I know I hit you guys with a lot of info but I hope it answered your questions...before I go any further I would like to know...
quote:
Originally posted by LieDecrypter:
Well...so there has been another corporate welfare case "bail out" of AIG to bad the market doesn't like the idea of a "socialised insurance company"...I hope you guys are asking yourself with the government being in so much debt itself just how is it able to come to the rescue of all these corporate dead beats?

Oh and NS and Khalliqa I know I hit you guys with a lot of info but I hope it answered your questions...before I go any further I would like to know...



great info tfro
quote:
Originally posted by negrospiritual:
Why AIG, but not Lehman Brothers? 19


What Kweli posted is basically correct and to add to that if you refer back to what I said previously... at this point it's all about trying to prevent an immediate full collapse. Had they not saved AIG this would have exacerbated the possibilty of this happening.
It's been running on nonsense for decades it was just a matter of when enough nonsense had been accumulated to go splat.

http://www.opendemocracy.net/article/america-s-financia...essons-and-prospects

I don't recall any Black leaders saying that accounting be mandatory for all Black kids in the last 40 years.

What were the interest rates on those car loans for those "nice" cars that we see Black ministers driving.

um
I haven't had time to read the whole thread .. so, if this has been asked and answer already I apologize. Smile But, I have a question ....

What, exactly, (and in plain English, please Smile) does it mean when "the Dow plunges 400 points"?? Confused

I know it's a bad thing ... but WHY is it bad?? And bad for whom? How does that affect me as somebody who doesn't even know what that is - if it does?? 19
The DOW [Jones Industrial Average] is a collection of industry leading public companies that are tracked to gauge the sentiment of investors. When the DOW goes up, it means that the investors are comfortable with their ability to make money via their stock holdings, whether through dividend payments or through stock value appreciation.

When the DOW goes down, it means that folks haver lost confidence in the market and are selling their shares at a loss.

How does it affect you? Well, pensions are invested in the market, so a declining DOW is a sign of declining pension fund value.
quote:
Originally posted by EbonyRose:
What, exactly, (and in plain English, please Smile) does it mean when "the Dow plunges 400 points"?? Confused

I know it's a bad thing ... but WHY is it bad?? And bad for whom? How does that affect me as somebody who doesn't even know what that is - if it does?? 19


ER, the Dow Jones Industrial Average is a measure of the average price-per-share of the stock of certain corporations publicly traded on the New York Stock Exchange. The corporations measured are considered to be benchmark stocks, meaning that by virtue of who they are, they are supposed to be representative of what the entire market is doing. When the Dow goes up, that means the companies are worth more per share; Dow goes down, it means the stocks are worth less.

The driving aim of a corporation is to increase/improve shareholder value. So if stocks decline in value, especially over a significant length of time (one day's results are not usually all that important), it means the company is not as healthy as it was when they increased in value. If companies aren't doing well, it signifies -- not definitively, but suggestively, at least -- bad things for the economy as a whole.

In addition to the Dow Jones, there are many other measurement indices. The S&P 500 is similar to the Dow; Nasdaq's average tracks the Nasdaq stock exchange the way the Dow tracks the NY Stock Exchange. There are other indices that measure different kinds of stocks -- there are small company indices, midsize company ones, ones that measure how mutual fund types are doing, etc. But the Dow is the one that people pay the most attention to, because they're the big "blue chip" stocks, like Ford Motor Co, IBM and the like, whose success or failure is considered indicative of bigger trends.

Meanwhile, if things don't start getting better, the best stocks to own in a couple of years will be bread and soup company stocks. And companies specializing in outdoor housing made out of cardboard. sck
quote:
Originally posted by Kweli4Real:
The DOW [Jones Industrial Average] is a collection of industry leading public companies that are tracked to gauge the sentiment of investors. When the DOW goes up, it means that the investors are comfortable with their ability to make money via their stock holdings, whether through dividend payments or through stock value appreciation.

When the DOW goes down, it means that folks haver lost confidence in the market and are selling their shares at a loss.

How does it affect you? Well, pensions are invested in the market, so a declining DOW is a sign of declining pension fund value.


I like to think that there are really TWO ECONOMIES.

There is the REAL physical economy wherr people work and make and do things,

and

there is the MONEY GAME economy of Wall Street and other financial gaming that doesn't really produce anything but feeds and leeches off the REAL economy.

This is why it makes sense that accounting is not mandatory in the schools. The suckers are supposed to be educated to work in the real economy not know how to do a good job of serving their own financial interests. This idea that what is good for Wall Street is mostly good for everybody is occasionally true but probably more than 50% of the time it is not.

There was a mnemonic we were taught to remember the pin letters on circuit boards:

Dow Jones Points Up Buy General Motors Stock

The propaganda exists even inside the corporations.

um
I asked for English, guys!! Smile But, thanks for trying! Big Grin

I do think I understood this:
quote:
Originally posted by Kweli4Real:

When the DOW goes down, it means that folks haver lost confidence in the market and are selling their shares at a loss.


and this:
quote:
Originally posted by Vox:

The driving aim of a corporation is to increase/improve shareholder value. So if stocks decline in value, especially over a significant length of time (one day's results are not usually all that important), it means the company is not as healthy as it was when they increased in value. If companies aren't doing well, it signifies -- not definitively, but suggestively, at least -- bad things for the economy as a whole.


And so my next question is: (And, again, in real simple terms, please flowers) What happens if our economy crashes?? Confused What would we expect to see? The rich becoming poor? Widespread job losses? Would our money become worthless (not internationally, but domestically? Soup lines?? What??

If I'm understanding you correctly .. all this DOW stuff is mostly affecting to investors and those who own/trade stock (with normal people's money tied in through their pensions, I get that), but this is not everybody ... and probably not even most people. So, what difference will/does it make to the rest of us?? 19

Also ... how did the other Great Depression end? Who's idea was it? And what did they do about it? Confused
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Originally posted by EbonyRose:
Also ... how did the other Great Depression end? Who's idea was it? And what did they do about it? Confused


Americans relearned the value of their money, and they saved more and spent less. That's how the country recovered from past economic depressions and slow downs. People are writing as if its armageddon, but this year is not the first time in America's hisotry that it has experienced an econonomic depression. I believe every society experiences seasons. America has enjoyed many seasons of splurging and reaping excess wealth. This forthcoming year will be a season for harvesting rather than reaping. And hopefully, as businesses notice people are spending less and less, they will lower their prices to match people's lowered standards of living. Eventually, I think once we get someone in office who KNOWS WHAT THEY ARE DOING and genuinely cares about the welfare of EVERYONE, not just members of his gender or people in his social class, then we will recover. People in this country are so used to getting the results of what they desire fast, now, and immediately. It just not going to happen overnight. It took America many years to get to this place, and it's going to take America just as long to move forward, but DIFFERENT leadership, representing DIVERSE cultures and women, is going to be the key to our society finally moving to a more socially and economically better place, and I'm really looking forward to the future. I'm glad things are changing, and I feel great about where the future of this country is headed under NEW MANGEMENT, FINALLY.
quote:
And so my next question is: (And, again, in real simple terms, please flowers) What happens if our economy crashes?? Confused What would we expect to see? The rich becoming poor? Widespread job losses? Would our money become worthless (not internationally, but domestically? Soup lines?? What??


The concept of GDP wasn't developed until the 1930's. So obviously there was no NDP and the term planned obsolescence wasn't coined until 1940.

So now we can say the economics profession has been lying to us for the last 60 years by not doing their grade school algebra correctly. No one could say hat in 1933. So if people actually begin to understand what it means maybe they will start lynching economists.

No one knows what it will be like there was no global warming and peak oil in the 30's either. The current state is the result of lies and information hiding over the last 50 years. How do people react if they learn about and understand the lies?

http://www.quantumcritics.com/general/from-economic-errors-to-globalies.html

umbra
As I read some of these posts I don't think that you guys really get whats going on in this country right now....I may be wrong and before I really get into this financial breakdown I would like to know what someone else thinks about this proposed "bailout"

Now I think it's the biggest cluster fck in American history..and I will back up why I feel this way. But if someone thinks it's a good idea I don't want to discourage you from revealing why... so I'm going to hold my peace for a while. I know that a lot of people may not understand enough about it to form an opinion..but those that do I would like to hear what you think.

I've noticed some guys on this site who seem to have a very good understanding of finance and economics...namely Kweli and Vox...I'm sure there are others but those are the two that I've noticed.

Although I hope everybody with an opinion states it because this my people is SERIOUS business and things are about to slide downhill REAL fast in this country....
LD,

I'm not savvy at all, but about a year ago, i began to sense something wasn't right with the financial story that was being sold by the news networks to the citizens... I think Kalliqa has made some threads regarding the fiat currency as well. From what i can tell, it's a mass transfer of wealth, and control to supersized banks, and the politicians are helping the supersized banks...including making it hard for the average citizen to file bankruptcy, sending jobs overseas, and forcing taxpayers to bail out wallstreet, with money that the taxpayers will be charged FEES to borrow from the same financial instititions.

...meanwhile the majority culture continue to persist in the belief that if only minorities had made their mortgage payments, everything would be hunky dory ek td6

the feudal system seems to be on its way back...

http://africanamerica.org/eve/forums/a/tpc/f/47970854/m/7471092644

http://africanamerica.org/eve/forums/a/tpc/f/47970854/m/8901080254

http://africanamerica.org/eve/forums/a/tpc/f/79160213/m/4671031464/p/1
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From what i can tell, it's a mass transfer of wealth, and control to supersized banks, and the politicians are helping the supersized banks...including making it hard for the average citizen to file bankruptcy, sending jobs overseas, and forcing taxpayers to bail out wallstreet, with money that the taxpayers will be charged FEES to borrow from the same financial instititions.


N.S., this is exactly what is going on. No more need be said ...except for the fact that america's institutions are wholly owned by the chinese. And ... the fact that the powers that be are preparing for an up-rising, having established the "legal" mechanisms to declare martial law and invalidate that "piece of paper with some writing on it" [president bush, 2006].

BTW, how would you prepare your forces for fighting an urban war? Could it be by having your citizen-soldiers, i.e., national guard - as opposed professional soldiers, i.e., career military, fighting a war in an urban setting inhabited by dark-skinned folk, like say Iraq [rather than the more rural, Afghanistan - which happens to have few dark-skinned folks]?
Jim, don't fall into the trap ... There is nothing about the "solutions" prroposed to deal with this "crisis" that can be considered socialist; fascist [in the over all effect] ... yes, corporatist [a better descriptor when limiting the scope to just the economy] ... absolutely; but in no way can anything that has been "seriously" considered be termed socialist.

In order for this/these plan(s) to be socialistic, the industries would have to be nationalized, i.e., placed in the hands of, and under the control of, a central government. Everything that I've seen and heard involves the industry remaining in the private hands, whose myopia and greed caused the mess in the first place.
What is sad about all this that that as ususal, the Democrats appear to not be showing enough backbone in this matter. If this is so 'necessary' to avoid a financial collapse, then why have we not heard the words, "freeze their assests," or "forensic accounting"?

It has been revealed that the Bush Administration already had this 'plan'/request' prepared months (probably years) ago and intentionally shoved it on congress with no advance warning/notice; of course it was done like this because they thought that after the media created enough histeria, congress would fold like a bitch and sign anything that they were presented with, however, they did not bank on congress actually having the balls to review it before acting, let alone challange its content.

Now there are reports of the FBI investigating companies on Wall Street for fraud, but its funny how there are no reports of the FBI, Congress, etc., are investigating the Bush Administration and the republican organization polititcians in general for causing this financial crisis in the first place by being in bed with Wall Street and Finacial Institutions (that they most likely own, worked for in the past, or have enormous amounts of stock in) over this and their past administrations.

Congress should be calling for an investigation into whether or not The United States is being targeted to be taken down from the inside out.

A forensic accounting should be done on ALL the monies spent by the Bush Administration.

All of the 'experts'that keep going to the media trying to blame this all on the middle/low/poor income class by continuously claiming this crisis it 'due to loans given to people who otherwise would not have qualified for a loan" should be called on this lie and fallacy; although banks, etc., did losen their
criteria to include people who otherwise MAY not have qualified for loans, there is no way in the hell that the institution would have taken that risk with the majority of its loans, so they need to come clean and admit that it was speculative loans to people who had money and did qualify for the loan(s) in the first place, but when the market changed (like it alwasy does) these people were not able to make the profits they had anticipated making in investments and defaulted on THEIR loans.

And if this 'bailout' does not include help for the average Joe as well, then it should be scraped and re-written, or just scraped, in fact I think that the Democrats should come up with their own version of a bailout, if this is truely as necessary as they claim it is.
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What is sad about all this that that as ususal, the Democrats appear to not be showing enough backbone in this matter.


Thus revealing the weakness of our elective governmental scheme ... the democrats don't understand what is going on and have to rely lobbyist and others' "expert" analysis; but they are paralzyed because they don't want to come out on the wrong side of the issue in an election year.

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It has been revealed that the Bush Administration already had this 'plan'/request' prepared months (probably years) ago


I don't doubt this but Citation please.

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All of the 'experts'that keep going to the media trying to blame this all on the middle/low/poor income class by continuously claiming this crisis it 'due to loans given to people who otherwise would not have qualified for a loan" should be called on this lie and fallacy; although banks, etc., did losen their
criteria to include people who otherwise MAY not have qualified for loans, there is no way in the hell that the institution would have taken that risk with the majority of its loans, so they need to come clean and admit that it was speculative loans to people who had money and did qualify for the loan(s) in the first place, but when the market changed (like it alwasy does) these people were not able to make the profits they had anticipated making in investments and defaulted on THEIR loans.


Bingo!

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And if this 'bailout' does not include help for the average Joe as well, then it should be scraped and re-written, or just scraped, in fact I think that the Democrats should come up with their own version of a bailout, if this is truely as necessary as they claim it is.


I would love to see a plan where the fed would purchase ANY bad debt from ANY organization at a deep discount ... alot like collection agencies purchase bad debt from vendors [5 - 50 cents on the dollar]; any organization that presents "Bad Debt" to the fed would be required to a issue value corresponding amount of stock the fed; the CEO would be fired and walk away with the value of his stock on the day after the Bad Debt is presented; the fed would re-work the loans for the consumers ... if it is a mortgage, the fed re-writes a mortgage for 80% of the mark to market value [what the house is worth if sold today minus 20%] ... for investors [those that cannot document that the mortgage is for their primary residence] re-write the loan for 100% of mark to market.

Though this plan is admittedly simplistic, it has several positives and few negatives. It would deal with the credit crunch/liquidity problem by purchasing the bad debt; it would treat the CEOs like we treat any other failed employee, they're out of there and don't get rich on the way out; but more, it'll keep homeowners in their homes, with equity, which will stabilize housing values. While investors would also be benefitted, this is a necessary evil.

Lastly, the plan would likely result in the fed, i.e., We The People, actually making money. The fed would profit on the purchase/re-write spread [currently about 35 cents on the dollar].
quote:
What is sad about all this that that as ususal, the Democrats appear to not be showing enough backbone in this matter. If this is so 'necessary' to avoid a financial collapse, then why have we not heard the words, "freeze their assests," or "forensic accounting"?



appl AMEN!

I heard a call in talk show where a senator on the banking and finance committee couldn't explain why this had to be rushed through in 7 days. he said well not 7 days, but definitely soon...because payroll, car sales, home loans and the everyday stuff like debit card and credit card transactions would grind to a halt. I guess the takeaway is this 700 billion dollar bailout is going to happen whether citizens want it or not...

why?
fro I always felt that this "financial" ride America's been on since the time of slavery....would finally disappear. You can't survive from obtaining your riches/power off the heads of human beings.... I am NOT surprised. I say "about time." Cuz what you put out in the universe....you get back EVENTUALLY. Massa's saying(while scratchin' his head)..."y'all what we gon do?Eek fro
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In 'plain Ainglish'...

It's capitalism on the way up.

It's socialism on the way down.

PEACE


LOL

If the people that claim that they believe in enlightened self interest and Adam Smith's Invisible Hand aren't a bunch of hypocrits, why haven't they benn advocating mandatory accounting in the schools? Wouldn't that help everyone pursue their self interest in an enlightened manner?

But the socialists object to it because it would make everyone thingk like a capitalist.

European psychology is built on lies and information hiding and the ideologies are twisted to rationalize the bullshit.

um
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I heard a call in talk show where a senator on the banking and finance committee couldn't explain why this had to be rushed through in 7 days. he said well not 7 days, but definitely soon...because payroll, car sales, home loans and the everyday stuff like debit card and credit card transactions would grind to a halt. I guess the takeaway is this 700 billion dollar bailout is going to happen whether citizens want it or not...

why?


Two words ... Shock Doctrine.

But the quote of the day [yesterday] was from a republican senator: "Just because the Lord made the world in seven days doesn't mean we have to remake our economic world in like time." lol

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