Is this financial situation really that serious?

[iheartmulletz]

I mean, I am reading some dire predictions here and cannot help but feel that there is some drama going down. I can't believe that layoffs will be so sudden (like in the next few days if a bill still hasn't passed).

Am I right or wrong?

[iiibbb]

1. I guess we're going to find out... aren't we.

[iheartmulletz]

3. Yup. *Gulp* Tomorrow should be velly intellesting...

Hold on for dear life, folks. It's gonna be a bumpy ride.

[lurky]

2. A ton of businesses use lines of credit to operate.

If all those are shut down, then they won't be able to pay employees.

[iheartmulletz]

5. I plead ignorance in these matters so here is a silly question about businesses and credit:

If a business is in the black, why do they need to use credit to pay their employees? It seems like a no-brainer.

[lurky]

14. They might have a client that is paying them on delivery.

Which could be months in the future. They might have a lot of assets, like stores, buildings, machinery, but not cash to pay bills.

Somebody might get a huge order and need to hire a lot of people to fill the order, but they are not actually paid until they fill the order. This is really common, and they can actually take the order to the bank, and use that document to establish a line of credit.

Another example is farming, where it takes months to grow a crop, and they don't get paid until the end.

[moodforaday]

18. Helicopter Ben just dropped $630 billion

of liquidity into the market today, says Bloomberg. So I wouldn't worry about credit drying up overnight. I'd worry about inflation.

[tama]

30. Notice

that central banks are pumping insane amounts because the intrabank credit market is practically dead - and with all the pumping they are doing, the credit market is not showing signs of life.

The debt bubble (inflated since 1980) has bursted.

[stillcool]

4. Who knows?

Interesting times.

[stray cat]

6. The next week will be interesting - I should have a job that long anyway

[The_Casual_Observer]

7. They can only "horde cash" for so long. This whole thing is utter bullshit.

It's pure blackmail for a crime I & most people didn't commit.

[greblc]

9. Money is like...

Water it will flow through.

[iheartmulletz]

12. Great way to put it!

I am so surprised at the fervor of the average citizen (who usually doesn't bother to pay much attention to what is happening in our country and world) against this bailout. I guess when it threatens one's pocketbook, it gets their attention. I was hoping the same would happen with the wars, but so small a percentage of the country's families are involved that it doesn't seem to pique the interest of the average citizen. Too bad, because this is one big reason why we are up the shit's creek without a paddle at the moment...

[earth mom]

8. The gamblers on Wall Street will be back in business in no time. nt

[shoopnyc]

10. Part yes, Part No...

...read this article by tom hartmann for hope.. http://www.commondreams.org/view/2008/09/26

[ww2player]

11. IMO the bailout won't help the Average Person

I was watching CNBC during the vote and the guy said 75-85% of the traders wanted the bailout to go through. AAnd if it didn't they would crash the market to force the politicians to spend that money.

They want that money to get their Billions in bonuses this year. They have already robbed mots of us average folks blind. Now they are feeding off the fat cats and it is starting to hit the Pigs in Washington in the pocketbook. The only thing keeping them from spending that Trillion $$ in a heartbeat is the HUGE amount of calls they have been getting from irate constituents. They DO NOT want to lose THEIR jobs!!

IMO House prices are to high due to the bubble that the markets-broker/dealers needed to feed off of. The SEC is a joke and COX should be locked up. The SEC lets Brokers sell shares of companies they do not own or borrow and never deliver. That is nothing but Counterfitting stock. Goto www.buyins.net and look at the 400+ companies that brokers are not deliving the shares to settle the trades on. Goggle "Dark Side Of The Looking Glass" to watch a video explaining how Naked Short Selling Destroys companies and drives them into bankruptcy. And investors lose all their money.

Voting for this Payoff bill will do nothing to help the average joe. But You can be sure that the ones who created this mess will definatly get a piece of that pie!!

When asked WHO was going to be in charge of giving out the money to buy the bad mortgages, Paulson I believe said it would be outsourced. So the folks who created the mess will be the ones getting the money to buy up the crap they created. Yeah.. Thats gonna work.

Keep telling your congressmen to Vote AGAINST THIS BAILOUT!!

[SammyWinstonJack]

13. Wait while I consult my magic eight ball.

Everyone love a little drama from time to time. :silly:

[RoyGBiv]

15. Read this ...

Read the *whole* thing.

The sound-bites you're getting aren't very descriptive.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=4027506

... and this ...

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=4105489

[moodforaday]

19. Meanwhile, please read

this:
http://www.dissidentvoice.org/2008/09/trouble-in-banktopia/

Then we compare notes.

[RoyGBiv]

22. My notes say ...

"Yes, the situation really is that serious."

This was the question I was attempting to address by pointing to HamdenRice's excellent posts.

The article at that link would seem to agree, no?

[moodforaday]

28. There is a crisis, yes

The difference of opinion lies in picking a remedy.

[jazzjunkysue]

16. Nope. The fed just released $700B in loans. Honest, simple, loans.

Why Bail? The Banks Have a Gun Pointed at Their Head and Are Threatening to Pull the Trigger

By Dean Baker - September 29, 2008, 6:09AM

http://tpmcafe.talkingpointsmemo.com/2008/09/29/why_bail/

If you have a real story, you don't have to make up phony stories. That's pretty straightforward.
I've heard lots of phony stories. Much of the country's political and economic leadership has been running around raising the prospect of the Great Depression and a breakdown in the banking system (I actually had taken the latter seriously). These stories are absolutely not true.
There is no plausible scenario under which the no bailout scenario gives us a Great Depression. There is a more plausible scenario (but highly unlikely) that the bailout will give us a Great Depression. There is no way that the failure to do a bailout will lead to more than a very brief failure of the financial system. We will not lose our modern system of payments.
At this point I cannot identify a single good reason to do the bailout.

Read more: Very reassuring.

[EV_Ares]

17. For small businesses the layoffs can come pretty quick. However, I still

think this will be passed by Friday sometime. They all know this would be too devastating to not pass it. Its bs what happened today.

[depakid]

24. That's what Obama is working towards

[Subdivisions]

20. Take one look around North Texas and you can't

tell anything at all is happening or is wrong with the economy. Houses are still being built. The new Dallas Cowboys $1 Billion stadium is still being built in Arlington. The traffic jams are still there. The air traffic is still flowing in and out of DFW.

Things look fine here.

[iheartmulletz]

21. It's a stinking lie. Like all the 'reports' about the economy in recent years

I never believed a single one. I wondered if they were bald-faced lying or just reporting on the smoke and mirrors economy.

[Subdivisions]

23. I'm not shittin' you. The movie theatres are full. The restaurants

are full. I hate malls so I don't know about them. But the activity hasn't seemed to change much, if at all.

[iheartmulletz]

25. Well, I am assuming that credit cards are still activated, no?

So either people have money in their pockets (which really isn't that big an indication of financial stability) or their credit cards are still on full drive.

[Subdivisions]

26. One last hurrah? I don't know. LOL. And, welcome to DU!

:hi:

[iheartmulletz]

32. Thanks for the greeting and nice to see Sarah all snuggled

[Realityhack]

27. No it will not all be overnight.

But if nothing is enacted it will be very very bad.
If nothing is on the table as a possibility markets will react to that. If things are in progress it will be softer.

You will likely see some movement in the next few days but the real issues will come if this remains uncorrected for a longer period.

In addition many of the immediate effects have further long term impact that will not be felt for some time.

[tama]

29. The Bubble:

[MillieJo]

31. Gordon Brown looked ill last night, when the news came through

I think your Congress has really distroyed the last ounce of confidence in America.
This is an international disaster, so deep that our political parties are now working together
they are seriously worried.