Comments on: A Possible Bailout Alternative?

By: Grace

Grace — Fri, 09 Jan 2009 06:10:02 +0000

With All the credit default swaps going around, no one wants to lend or move paper. Everything is frozen, and almost no one has equity. Even if you put down, money, you may very likely be upside down. The next year should be very interesting.

By: Gov’t Dems Caused Housing Crisis, Including Obama &laquo Publius’ Forum

Fri, 26 Sep 2008 20:17:22 +0000

[...] doing their best to lay the blame for the current financial crisis at the feet of Free Marketers. Reality based insight into the Governmental basis for the meltdown and solutions for the problem are simply ignored in an orgy of blame the Market and the GOP so we can extend Government control [...]

By: sadcox

sadcox — Wed, 24 Sep 2008 13:14:45 +0000

@Hungry Mother,
If I understand…

Book values spiraled down when everyone tried to liquidate at the same time because values got tied to daily market values instead of what true market value would be over the long term. Because the books said these assets (subprime mortgage bonds) were falling in value, everyone tried to dump, which drove the price down even further.

Add to that the fact that all these firms were 30x levered due to artificially low interest rates set by the fed, so they were hurting in the liability column as well.

I don’t know much about economics outside of stuff I’ve read–no “official” training, so anyone feel free to correct what I’ve said if it’s off base.

Of course, Warren Buffet said this morning that he’d buy it all if he had $700B.

By: Hungry Mother

Hungry Mother — Wed, 24 Sep 2008 12:56:52 +0000

Part of the problem is that the mess is so complicated. I don’t understand the situation you’re describing, even though I haven’t lost most of my brain cells yet. I have a friend who’s been a stock broker in Boston for about 40 years. He shocked me when he told me that he doesn’t really understand what’s going on.