[Buggy]

I'm your average middle classer. I pay cash and save for what I want. I squeak by. I always will. So why all this fuss and worry about the economy? This is about the rich no longer getting richer, isn't it? It's about the cry babies who are living beyond their means no longer being able to get loans. It's about people who have no business being in business not being able to charge for next months goods. And who will ultimately pay to keep the rich rich, the meaningless living beyond their means and keep the unworthy business owner in business???? Yup, that's right, me. Your average middle classer.

[Eli]

It is about the Captains of high finance around the globe wanting to keep their seats as number one. It really isn't about people living beyond their means or people going too far in debt, that all was just a means to an end for those who control money and power around the world.

Now their system is fubar and they want us all to become their debt slaves.

It is a naked grab for power.

[mmasters]

It's the end of the US's reign and a consolidation of global power on a high level is taking place. The lower, middle, and portions of the upper class are being relegated to a lower status. People that thought the party could go on forever are now turning into overt slaves of the debt system. They're not going to tell you all that on CNN though!

[joeltrout]

I'm your average middle classer. I pay cash and save for what I want. I squeak by. I always will. So why all this fuss and worry about the economy? This is about the rich no longer getting richer, isn't it? It's about the cry babies who are living beyond their means no longer being able to get loans. It's about people who have no business being in business not being able to charge for next months goods. And who will ultimately pay to keep the rich rich, the meaningless living beyond their means and keep the unworthy business owner in business???? Yup, that's right, me. Your average middle classer.

I am really sorry you don't understand how this actually affects you and our economy.

joeltrout

[emeraldg40]

I'm just glad I don't have to hear the commericials about " I bought all these houses WITH NO MONEY DOWN" What a relief.

[Buggy]

It is about the Captains of high finance around the globe wanting to keep their seats as number one. It really isn't about people living beyond their means or people going too far in debt, that all was just a means to an end for those who control money and power around the world.

Now their system is fubar and they want us all to become their debt slaves.

It is a naked grab for power.

Ahhh, good response. So it isn't even about the rich staying rich. It's about the powerful staying powerful. That would explain Pickens and his hairbrained schemes about natural gas. Money is just a perk to power.

[jbrovont]

No kidding!

I'm just glad I don't have to hear the commericials about " I bought all these houses WITH NO MONEY DOWN" What a relief.

[Buggy]

I'm your average middle classer. I pay cash and save for what I want. I squeak by. I always will. So why all this fuss and worry about the economy? This is about the rich no longer getting richer, isn't it? It's about the cry babies who are living beyond their means no longer being able to get loans. It's about people who have no business being in business not being able to charge for next months goods. And who will ultimately pay to keep the rich rich, the meaningless living beyond their means and keep the unworthy business owner in business???? Yup, that's right, me. Your average middle classer.

I am really sorry you don't understand how this actually affects you and our economy.

joeltrout

Nice 1st grade response. Gotta do better than that. Naa naa naa naa naa.

[copious.abundance]

I'm your average middle classer. I pay cash and save for what I want. I squeak by. I always will. So why all this fuss and worry about the economy? This is about the rich no longer getting richer, isn't it? It's about the cry babies who are living beyond their means no longer being able to get loans. It's about people who have no business being in business not being able to charge for next months goods. And who will ultimately pay to keep the rich rich, the meaningless living beyond their means and keep the unworthy business owner in business???? Yup, that's right, me. Your average middle classer.

Like it or not, it is Wall Street, along with Washington, who keeps the money flowing. If Wall Street and/or Washington are screwing up and the money isn't flowing the way it's supposed to, Main Street will soon get screwed. That's just the way it is.

[jasonraymondson]

I am your average poor ass, close to living on the street gutter trash.

Oh well. If shit gets bad, I am in great shape and one hell of a marksman.

[wisconsin_cur]

I am your average poor ass, close to living on the street gutter trash.

Oh well. If crap gets bad, I am in great shape and one hell of a marksman.

I thought you (re)-enlisted? I think you have job security there.

[jbrovont]

Main street was screwed as soon as the bad loans started flowing. Sooner or later, it was going to wind up here. Am I ok with shouldering it all on the peons and letting the pirates walk away clean? Nope. I have to pay for this one way or another - and IMO, so should they. Chosing between breaking the system and letting the thieves continue their game? It was a broken and unjust system, and I have no desire to save it.

I'm your average middle classer. I pay cash and save for what I want. I squeak by. I always will. So why all this fuss and worry about the economy? This is about the rich no longer getting richer, isn't it? It's about the cry babies who are living beyond their means no longer being able to get loans. It's about people who have no business being in business not being able to charge for next months goods. And who will ultimately pay to keep the rich rich, the meaningless living beyond their means and keep the unworthy business owner in business???? Yup, that's right, me. Your average middle classer.

Like it or not, it is Wall Street, along with Washington, who keeps the money flowing. If Wall Street and/or Washington are screwing up and the money isn't flowing the way it's supposed to, Main Street will soon get screwed. That's just the way it is.

[mefistofeles]

So why all this fuss and worry about the economy?

I'll answer your question with a two expressions:

First from the matrix:
"There is no spoon."
There is a virtual economy that coexists with the "real" economy where goods are produced its called financial economy. The activities of this financial economy affect the "real economy" by creating credit that can be used to purchase goods and services in the "real world".

Now when this financial economy goes bust the ability of the real economy to operate is hampered.

When most firms deal with others firm they don't bill immediately they have what are called terms that determine when their suppliers are paid. This is especially true for retail when a supplier will ship goods to customer before he is paid. Usually its 30-60 days for most large companies. Companies can do this because the can arrange for lines of credit from a bank that can cover their outlay. However if the credit system collapses and you have no faith in getting paid what happens to economic activity? It slows down because as a supplier you want to be paid upon delivery or even in advance, because your not sure if the company delays paying you later that you will be paid.

Even if you have good customers if you can't wait until the end of the month to pay them you may have a mismatch between when you get paid and when you pay suppliers. This in and of itself could be a big problem.

Now imagine that you want to expand. It takes time to build new factories or expand an existing facility but you need the money immediately. If banks can't advance you this money its hard to expand your business.

In addition alot of companies finance their customers by issuing credit cards for their particular store.

Consumers can't buy homes or cars because there is no credit. Students are unable to obtain financial aid.

Yes people can get along but their access to credit is greatly impaired, or if they do have access to credit interest rates are much higher.

Now sure maybe you can live on a cash basis, but what about your employer? What about the supermarket that you shop at? Or better yet what about your employers customers can they live if they can't obtain credit or financing?

Now of course if there is a credit collapse even if you had extra money would you want to put it into your mutual fund or bank? Banks are important because they lend money and inject money into the system. Although to a large degree they have been displaced by the investment banks.

So therefore there could be no capital formation(if people stopped depositing their savings) and banks may not be able to lend.

Believe it or not that's not really the worst part of this crisis. That's just the begining the worst part is that the dollar could collapse. To use another expression:

"From the one come all things and from all things come the one.":

Most of the world's key economies are tied into the US. More importantly the US dollar is the world's reserve currency. In other words the dollar is the closest thing the world has to a global currency. You can go many countries and get price quotes in dollars.

As a result of the dollar being the world's premier currency 2/3's of the world's commodities (most notably oil) are priced in dollars. What that means is that if you want to buy an oil futures contract its done in dollars. Therefore you need dollars.

Yes you can have a contract that is denominated in other currencies but when you engage in price discovery to figure out how much you going to pay for that contract, its done through dollars. Even if both buyers want to use another currency.

This is important because the US imports 2/3's of its energy. It doesn't need any other currency except its own to buy all the oil it needs.

Now if this financial crisis causes dollar denominated assets,i.e. mortgage bonds, to collapse in value the US government will have to sell even more Bonds. At some point there is a limit to how many US bonds the foreign markets can absorb. Too many foreign bond sales and their is less demand for treasuries. Pushing down the dollar.

If this happens there could be a "run on the bank" for the dollar, i.e. no more cheap imported. No more shoes from China. As you can see this could lead to rapid collapse of the US.

Think about like this, we still haven't recovered from Ike. Now imagine if someone pulled twice as much oil the US would have serious problems.

For various reasons I think the bailout is a bad idea. However I can see why people would want to keep the credit system and therefore the dollar itself going.

[joeltrout]

Nice 1st grade response. Gotta do better than that. Naa naa naa naa naa.

No I am just getting tired of answering the same question because everyone thinks they have to start a new thread to talk about the same subject.

joeltrout

[Concerned]

Nice 1st grade response. Gotta do better than that. Naa naa naa naa naa.

No I am just getting tired of answering the same question because everyone thinks they have to start a new thread to talk about the same subject.

joeltrout

Well then just be silent and don't answer with banalities

[Specop_007]

I'm your average middle classer. I pay cash and save for what I want. I squeak by. I always will. So why all this fuss and worry about the economy? This is about the rich no longer getting richer, isn't it? It's about the cry babies who are living beyond their means no longer being able to get loans. It's about people who have no business being in business not being able to charge for next months goods. And who will ultimately pay to keep the rich rich, the meaningless living beyond their means and keep the unworthy business owner in business???? Yup, that's right, me. Your average middle classer.

I am really sorry you don't understand how this actually affects you and our economy.

joeltrout

Nice 1st grade response. Gotta do better than that. Naa naa naa naa naa.

1st graders deserve first grade responses.

I'll go one step further then him and give you a first grade mental picture however.

While everyone talks about cogs in the machine remember this. The machine needs the cogs every bit as much as the cogs need the machine. Its a symbiotic relationship. If the machine fails the cogs die, if the cogs fail the machine dies.

[Buggy]

Nice 1st grade response. Gotta do better than that. Naa naa naa naa naa.

No I am just getting tired of answering the same question because everyone thinks they have to start a new thread to talk about the same subject.

joeltrout

I do feel your pain about repetition. That is why my post was broader in scope in line with the section's name. I was hoping for broader responses away from the bail-out since the bail-out is just one little piece of a very messy puzzle. Most of the posters have done well with that.

[Buggy]

1st graders deserve first grade responses.

I'll go one step further then him and give you a first grade mental picture however. While everyone talks about cogs in the machine remember this. The machine needs the cogs every bit as much as the cogs need the machine. Its a symbiotic relationship. If the machine fails the cogs die, if the cogs fail the machine dies.

You did MUCh better than a 1st grader! I had to look up symbiotic and I'm not sure what a cog is. Is that the thing you use to knock a jam loose?

[AlexdeLarge]

Some of the talking heads were talking last night about how the frozen credit markets are impacting retailers. Now is the time they start preparing for Christmas Sales. They need short term credit to stock the shelves.

Of course this year, it may be a blessing in disguise. Christmas sales are going to be dismal. The only thing worse than not having the goods to sale, is being stuck with them when nobody buys.

This may be a year without Santa!

[Nickel]

This may be a year without Santa!

You'll have to PAY for your coal this year.