People, It's Bad Yall (NRR)
The_Non
5,691 Posts
Not to be a negative dude, but this chick:Elizabeth Warren Chair, Congressional Oversight Panel on TARPIs on the Daily Show right now, and she don't know sheeit except for how much money has been lost. I'm not brimming with confidence. South Park episode was on target. People, it's bad when Jon Stewart is starting to look like Edward Murrow interviewing unprepared and unequipped public officials.
Comments
The amount of global assets lost last year: 50 trillion
The amount of cash in all currencies world wide: 7 trillion
Dunno what it means but it can't be good really can it?!
what a house of f*ckin cards
Well considering many of those "lost" assets were "created" in the preceding bubble, I don't think it's as bad as it sounds.
From what I've read, when they say shit like that its just relative valuation.
Like one day some 80s soul turd is worth $5, then 5 Soulstrutters go run up the price on 5 copies on eBay and buy each of them for $50, and then no one else buys any more of them and they drop back down to $5. Does that mean $45 per soul turd was lost from the economy? Not really.
Uh, ever heard of negative equity? Imagine you were stuck with your Boots Randolphs until 2054 with no option to trade.
I'm stuck with my Boots Randolphs for infinity.
Yes things are negative right now. But my point was it's not as bad as it sounds. They said 50 trillion gauged from the height of the bubble. So in actuality maybe only 20 trillion was "lost" (until it returns). And yes, 20 trillion is still a large number. But it's not 50t.
Also, when prices are figured, money has to be changing hands for the prices to fluctuate. So the money isn't POOF! up in smoke, people are just sitting on it in their bank accounts instead of having it in stocks (or whatever).
But yes if you rode things down and are still holding your stocks then you are left holding the bag for all the other people who pulled out 2 years ago. Until prices recover. In 2054. So money has been reallocated, definitely.
I think I'mma be sick
If you'd have said Mitch Miller I mighta earl'd
You didn't get a letter from your bank yet? It's in the mail.
It's happening to people all over the country. You can call them up and negotiate to freeze your card and pay it off at the old rate. This is their plan to reduce their catastrophic balance sheets but it will throttle the US economy in the process.
Cash in my pocket at all times.
I didn't say who got the money. In the situation with your toxic mortgages, people selling real estate, mortgages, and related products industries raked in a lot of the money. Banks loaned it out, people defaulted, and now banks are dumping it on the American taxpayer.
As I said, the money isn't gone, it's just been redistributed. There are people in the financial industries who made big bank. Then there are people who are holding their Boots Randolphs until 2054.
Didn't say it was nice. And I'm not being a smartass, I'm a guy who is unemployed directly because of the whole mess.
I recently swapped my credit card debt over to what I believe (honestly) was quite possibly one of the last 12 month, 0% APR, $0 balance transfer fee credit cards. I hope they continue to honor it.
Thus far my other cards have maintained their rates and limits. I've deliberately not paid off my balance (esp. at 0%) or closed any cards because I figure going forward credit will not be easy to come by.
I think the stimulus spending will be good for people.
They are fn up everything else.
OK, so we are talking about different sides of the same coin. But the wealth has not so much been re-distributed as it has been spent... and it was spent before last year, before 07 even, when the Credit Default Swap shit started. Spent by yuppies who thought they actually earned it. CEOs who really thought them getting up in the morning and making a few conference calls was worth 2000 times more than the men and women who cleaned the place at night. It's been spent on champagne and caviar and rare Latin terds. And now that segment of the population is crying to people like Bush and Bloomberg and Geithner and, yes, Obama about needing help or the whole system will collapse aka "this sucker could go down". Well it already has.
But I guess my point is the money went somewhere. You're talking about the havoc created on the general public, which is true. I was addressing the earlier comment about 50 trillion in wealth being "lost"; and I was simply illustrating that it wasn't really lost at all - simply a combination of being imaginary growth in value and real dollars being "hidden" in peoples bank accounts and not cycling through the economy.
But yeah, that's the redistribution of wealth I'm talkin about - those CEOs who raked it all in, various bank industry folks who collected fat commissions selling the junk products, etc. The money to pay those guys was siphoned first from properties via junk mortgages, and now that the whole economy is in the toilet, it's coming from the everyman.
The money that is "gone" will return eventually, coming out of hiding when people are comfortable enough to spend. But yeah, all the stimulus junk - I think most of that is going back to the douches who started the whole mess. But it's "there".
I think the whole situation blows, but I think the bigger long term issue is our overall poor economic performance. Long story short, when the country has more cash going out (to places like China) than it does coming in (via exports), and if you keep subtracting money from the economy eventually you get to 0. (Probably won't get to absolute zero, but you see my point).
But that is another thread.
The problem is all those bad decisions were made on the backs of other bad decisions made on the backs of working peoples investments and holdings. So now we have to pay because a bunch of strutters ran up the price of Boots Randolf.
Unless I'm missing something?
You've got the middle of it.
Turd is $5.
Strutters get into a bidding war and run it up to $50. And yeah, it sells for $50. But is it really worth $50? Probably not; it was artificial because 5 Strutters happened to (temporarily) run up the price due to a post on Soulstrut.
Strutters get their copies, heat is off, price returns to $5.
And that was what I was getting at when he said $50 trillion was lost.
Think of those turd records as people's 401k's and retirement funds. Say all the other people who bought the turd record at $5 look on ebay and are like "HOT SHIT! My turd is now worth $50! I've got $50 to retire with!" - but they don't sell it.
It's imaginary because the "wealth" that has been created and then "lost" could never have been sustained. There were never more than 5 Strutters who would pay $50 for that turd record. So 100 people are thinking they can get $50 for their turd record, but really the demand is not that high. It's temporary.
That was the housing bubble more or less. Prices were driven up by speculators, not by real homeowners. Speculators need someone to sell to. There were no "real" homeowners to back up those huge prices. Eventually the prices were too high and demand dried up. Boom. Turd is back to $5 (or in this case, less than $5 - for now.
Cutting it really short, mutual funds etc. were invested in real estate and real estate financial products. Our turd holders looked and said "HOT DAMN! Look at my mutual fund! I'm rich!" No.
But you're right, for those 5 people who sold their turds for $50, they made out with $45 extra dollars. Great return! And that was my comment about wealth being redistributed. The turd sellers at the peak were misc bank employees collecting fat bonuses, real estate speculators (who got out in time), mortgage brokers, etc.
So, like I said, the real money that changed hands for those 5 records didn't disappear. It's just sitting in someone else's bank account, waiting to ride out the recession. For the other 100 turd record holders, it was a mirage.
I hope that wasn't too convoluted.
Shit, I just found out my credit card company is now charging 2.5% on any purchases outside the country. First they charge the interest rate and then they make money in the exchange rate and now 2.5% on top of that??? WOW...
Everyone should call their card companies and fine out if anything has changed on them. Cause I never got a notice. I was just calling to let them know I'm in Asia for the next month and gurl was like OH BTW, did you know...
citibank sux
No, that's why it's kind of silly to say 50 trillion was lost. LIke half of it never existed. Going back to my record analogy, they're taking the bubble turd price of $50 and applying it to all the turd records out there, and then saying it was lost because the turds don't command $50 anymore. But the demand was artificial so they really never were worth that much.
I don't know what the actual figure would be, but yeah, $50 trillion "lost" is not really accurate.
Getting $5 for a record you once spent $50 on...
borrowing $50 to buy a record, which you bet will be $100 the next year
(then it falls down to $5 and you owe money to someone else)?
...a loss now can mean an investment for the future-
in fact an investment always means a loss in the first second!
Worldwide economy only works, because the majority of people spend more for things than the re-sale value is (re-selling means work, what's the value of the work you need to do to resale??). You are part of it. No one can only win money,
is it food, is it fuel, you always have to spend something at a certain time.
The only moment, imo, when money really is LOST,
is when people don't use it as an instrument any longer
and can't be controlled by it.
BINGO!
Graf: Yes, they were imaginary assets, but they were converted into cash by borrowing against speculative profits. "Assets" were in fact debts on credit cards and mortgages. Once there were no more corporations to sell and re-sell these "assets" to, the bubble burst and the losses became real for the little people who got in to the housing market too late, or refinanced, or had their mutual funds and 401ks "aggressively" invested by fund managers.
I don't call this a loss. You can learn a lot of things out of that situation-
if you learn much, it was a good investment... but of course
...if you don't put in some extra work (thoughts), you are going to loose the $5 too in the end!
"are people different than 1929"?
Besides:
"Borrowing money to make money?"
--> future trouble
"All the money on one item?"
--> $45 loss
5 x $1 spent on different things
--> ?
That's an added layer to the fun. I don't dispute your scenario at all.
"This whole recession thing is a drag. Let me know when it's over, k?"