To put this in perspective:
history of crashes
It is the largest one day drop, in raw numbers (777 is still a lot). In terms of percentages, both '29 and '87 are much, much worse. But this has been a sustained issue over the past few weeks, much as those were. So at least a recession is likely. (Wall St either was blinded to this for a while or in denial).
I'm only pleased they didn't pass that weirdo bill. Capitalism doesn't work very well if the losses are public instead of private. Let them suffer and if the government uses its unlimited money power to buy out some things, then they should get the profits of whatever is in there.
As to the mortgage associated problem here, it's been a long, long time coming. Very smart economic minds have been avoiding a fair number of banks or trading firms because of the amount of leverage and wacky loaning going on. Most of the very smart minds unfortunately were too busy trying to ride the waves instead of getting out of the water. I say to that: too damn bad. A few people may lose their homes because of the issues with multiple owners of the loans. Most people with simple one mortgage loans or at least two with the same company should be fine. It will be easy with banks in desperate straits for capital to come up with arrangements to keep paying them something so they don't have to sit on an unsold (and unmovable) property for months paying taxes et al on it.
*Gray Matters*
1 hour ago
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I've been waiting for a post on this!
I don't think it's that bad yet, but what do I know? I think the private sector should eat the losses, or as you put it, the government should take the profits if they buy them out--the whole money lending thing to me seems to be playing favorites and stupid; the gov't shouldn't be lending money--if it buys something, give it the profits and allow the taxpayers to make the demands (that is, how much executives can make). But where are all the raining suits!?!?!?! I feel like if a huge corporation went belly up in Japan you'd have suicide being performed almost immediately. All these unctuous fucks trying to weasle out of it makes me sick! I wanna hear the smooth sound of a $200 silk tie rippling through the air before the corpulent body of some short-term greedy fuckface splatters on the pavement.
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