Why is the F.D.I.C. insurance increase from a hundred grand to two hundred and fifty thousand dollars the most important aspect of the bailout? ( so it seems from the above threads?)

Why can't they round up all the criminals who milked the system, and get them to pay back their ill gotten gains?

Why does Joe six pack (U.S. taxpayer)have to carry the bailout on his shoulders?

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Why is the F.D.I.C. insurance increase from a hundred grand to two hundred and fifty thousand dollars the most important aspect of the bailout? ( so it seems from the above threads?)

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Of course this isn't the most important part of the bailout [ which shouldn't be happening at all]. It's just that if toy arrow factories in Ohio, race car drivers and rum distillers are going to climb into the life raft , why shouldn't we, the ordinary people who are the most tangible, visible victims of this theft at least be thrown a life preserver, saving our bank accounts, which in many cases contain one's life savings?

AS for the criminals who, over the decades perfected and masterminded the demise of our financial system? They are busy pointing the blame someplace else and more than likely won't even get fined, let alone spend a night in jail. Other politicians who should have tried a little harder to stop them, have sold out, signed the 'rescue papers' and are just as much a part of the problem as the ones who succeeded in relaxing our financial laws to include anybody who wanted a free house or a new vehicle.

I'd better stop there, since I value my FT posting privileges.

opentv, the title of this thread is How Is The Economy Affecting You, and I did intend that it be a more personal discussion than a general discussion of the economic crisis. It's one thing to hear lots of facts and figures about the economy, and another to hear about how it is actually impacting FT members' lives.

While FDIC limits might not be important to some people, or very much a part of the big economic picture, they are a factor that is of personal significance to me right now because most of my retirement assets are in cash that is parked in banks. Of all the things in the rescue legislation that was just passed, that's the one part that's most likely to immediately and directly affect me.

Because I live in a state that's particularly vulnerable to problems in the financial markets, as well as the general economy, our governor recently announced that NYS now has a budget deficit of about $1.2 billion dollars--something that will directly affect state services as well as my taxes. Property and school taxes in my county are already sky high and continuing to increase. Many seniors, who own their homes free and clear, sometimes cannot afford to remain in this area simply because taxes consume so much of their available income, or because they can no longer afford the taxes at all. And, right now, it's not all that easy to sell your home and move to an area where retirement funds can be better stretched. This too, all becomes a rather immediate personal issue for me.

The bail-out legislation is not likely to improve the average person's economic situation in any significant way, anytime soon. Hopefully, the bill just passed will stop the bleeding in our current crisis. Warren Buffet has compared our current economy to a great athlete who has suffered a severe stroke--recovery will be long, hard, slow, and uncertain.

There will be no miracle turnaround, and the legislation just passed may not even work to help contain the problem. For many people, and families, that may mean a drastic change in lifestyle and quality of life, and the fading of many dreams. For others, the financial stress and ensuing hardships may push them beyond the breaking point in terms of emotional endurance.

Last week, I met someone who impulsively knocked down a cashier and robbed her cash register because he felt so desperate for money due to unemployment. I meet people who are living in cars or on relative's couches because they are unemployed and have been evicted from apartments or had their mortgages foreclosed and lost their homes. I meet people who are unemployed and going hungry because they have been denied Food Stamps. I meet people with severe health problems who have no medical coverage and cannot afford to take life-saving medications because they lack insurance.

Our jobless rate is very high, and the people who are being affected are not abstract numbers for me--I meet these people continuously, and their plight affects me directly in a very emotional way. I feel sad and helpless, and angry that the government lets people disintegrate into such poverty and desperation. I think that people who complain about having a "Nanny State", and oppose government handouts, either have no compassion, or they lack any direct experience with the hardships and suffering which is occuring in their midst and the toll it is taking. And, before things get better, I think they will continue to get worse.

So, the current economy is affecting me in all sorts of personal ways.

ktstew, I'm impressed with your foresight in trying to stash away non-perishables for the winter. Do you anticipate you will suddenly have more mouths to feed appearing on your doorstep, or are you doing this mainly to provide for your own immediate family?

Just an aside...chelseabelle, I am in awe of the many diverse writers in this forum, including yourself.

We have magnificent thinkers here, and I'm proud.

From the bottom of my heart...thank you.

I can add some personal effects on all my family, and these have been taking place not just this year but have been growing for a few now. Besides myself the rest of my family is retired, and whatever their investments they have gone westwards. They can't win. Having worked all their lives they now find shares are no longer a safe haven, having steadied some years ago and meant many equity based pensions and investments haven't just stood still but ran out altogether when they were also used to provide income. At 70 plus it's too late to just leave them to recover, and even if they had they'd still be waiting.

The alternative is fixed and variable interest accounts, and these are not just low, but barely above inflation. So people borrowed at ridiculously low rates while savers barely broke even. The retired people seem to have lost the most here as their incomes have been steadily reduced for a few years and no billions from Washington are going to bail them out. There seems to be no reward now for taking good care of your money over a lifetime but lots of help for those who threw it away. That seems to be the priorities of right and left even if for apparently different reasons. They are all still elected with the help of those really behind all the current problems and always will so they will be the ultimate beneficiaries before anyone else gets a look in.

Have any of you seen the documentary movie, "Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders"?

http://www.imdb.com/title/tt0762117/

It's very, very good, a real eye-opener. Everyone should see it. It has been running on one of the cable movie channels, that's where I caught it.

http://www.youtube.com/watch?v=YiOVNWoWTAU

Frankly I'm rather excited about it at the moment, all be it from a selfish standpoint. Just waiting for the right moment to pick up some new cheapy shares.

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ktstew, I'm impressed with your foresight in trying to stash away non-perishables for the winter. Do you anticipate you will suddenly have more mouths to feed appearing on your doorstep, or are you doing this mainly to provide for your own immediate family?

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You know, initially I just planned to make sure everybody at this address got fed, but if things go terribly awry, there's a couple of others in the family to consider. My sister honestly thinks I've gone 'round the bend for finding bargains and storing them away for later. I talked to her just an hour ago and it was still easy to detect the irritation in her voice. She and I are different: One tends to think everything will 'somehow' turn out alright, regardless of what we do. The other hopes for a decent end to it all, but isn't above storing a little extra catfood and chicken noodle soup to make the bumpy ride a bit more comfortable in the meantime. The news from the market gets more dismal every day and who knows what things will be like by the end of the year? As it is, we are borrowing close to two billion dollars a day from other countries to keep things running right now.
I know have friends locally who read the Journal and listen to financial analysts on a daily basis. These folks [some worth quite a bit] are also putting something aside for later. What could it hurt? If things turn out better than expected, then it just means I spend less money on groceries next year.
But I'm already hearing in bits and pieces that inflation of astronomical proportions might be just ahead. It's really anybody's guess right now.

I've noticed since the bailout went into effect, all the Dow seems to go is down. It's threatening 9,000 now, as it closed down over 100 points for at least the third straight day, and is down the last six overall. Thankfully, oil is going in the same direction, and has closed below $90 for two straight days, and gas prices are hovering just over $3 here in Dallas, with more to come off as the market price is about $2, and fell intraday today to $1.95. Ardmore, OK, about 75 miles north of me, is already below $3/gal.

Oddly here although the oil price went down as well (although it always varies with the exchange rate) they always wait weeks to drop petrol prices as they say they bought when it was high. We're still waiting.

Our interest rates also went down today but although investors very swiftly had their savings rates reduced there is no obligation to reduce those of borrowers. Our government is giving with one hand and having it taken away by many others. I'm wondering who will benefit from all these cash injections, especially as ours have all come from extra borrowing. From who exactly, and at what interest rate? As we are actually the ones who will still end up paying it back over the long term, like after black Monday or whatever day it was (there are so many now) in 1987 when our interest rates went up double figures in a day and sent us into recession. That was (and it is official) due in the main to a few individuals speculating on the new European trading currency before the Euro, the biggest winner being a George Soros who lives near me but in the expensive part. It was quite legal so no harm reporting it, but at the time the money lost by UK plc actually could be traced. I doubt things are any different now either.

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That was (and it is official) due in the main to a few individuals speculating on the new European trading currency before the Euro, the biggest winner being a George Soros who lives near me but in the expensive part. It was quite legal so no harm reporting it, but at the time the money lost by UK plc actually could be traced. I doubt things are any different now either.

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Soros is well known here in the states as a speculator in dubious political projects. It doesn't surprise me that he would be willing to bet against the home team that way [ since he now lives in England] in order to make some easy cash. When you're among the top 100 wealthiest people in the world -well of course you need more, even at the expense of plunging your adopted country into bankruptcy. He has many shady enterprises to oversee and they all require money. He's a busy man and can't be bothered with ethical details.

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Was it blaming the lenders mostly? I can see that their lending practices are wrong but surely people have to take responsibility themselves when they take on so much. Of course there are people doing it tough for no reason of their own but there also seems to be a sense of entitlement that people have to say that they want that and they want it now.

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There's a radio commercial in the US right now -I hear it all the time. It features a giggly young woman, who chortles something akin to "well, I guess I just got caught up in the crazy housing boom!" -meaning some 'good hearted' bank probably wrote her a loan to buy a quarter million dollar house - to be paid back on what she makes at her secretarial job.
Other voice overs come on after that...an elderly lady, then another young person who, in a shocked voice says "We were in big trouble with our payments after the introductory loan rate was over..."
Of course this mess was started by corporate greed and relaxed lending stipulations...but the potential home owners were equally to blame. My parents didn't own their own place till they had saved 20 percent of the total price. Then they bought their first home. They also knew how to balance a checkbook and use credit cards for emergencies- not cater to their family's passing whims.

Unfortunately that perfectly illustrates how easy it is to get one over on so many of the public. The sellers understand the market very well and are good enough to persuade many unable to resist the advertising who only learn from their mistakes. No one's breaking the law but if the sellers then become as gullible as their victims and believe the stream is endless they have simply been hoisted by their own petard. How they did is another mystery to me as the billions they're all handling you would assume to be in safer hands. I've never really come across the sharks becoming as soft as their own prey before, it seems a piece of the jigsaw may still be missing and I don't know what it is.
And it's not the law in the States either as has been suggested as we did the same here and there's no preferential mortgage law here for anyone, people are expected to either rent or buy if they can afford it. The lenders simply chose to accept nearly every customer, assuming their property would rise so much they could just repossess if things got tough, and because they did this they pushed up the prices so they ended up lending far more than the properties were worth, and now if someone defaults the places are slowly (here anyway, not like 1995) falling so some of the money is lost. Of course it was never really there as the prices were artificially high driven up by the reckless lending, so really they've lost money they never had in the first place.

If you look at definitions of monetarism, adding money to the economy as they did with no new production just causes inflation. Everyone on the outside could see it coming but they just kept digging themselves deeper until it was too late. I have yet to hear of any of the bankers losing more than their jobs yet, and in London offers were being made to them the day they were sacked by others eager to employ them, especially local councils who said they had staff shortages. They can't pay as much of course but won't go broke either.

Yet another down day here...with 15 minutes to go in the trading day, the Dow is down another 600 to well below 9,000.

This worldwide meltdown is really simple to understand.

It is a winding down of economies that have prospered through capitalism.

It is reversing the flow of dominoes, which began with one domino that was tilted in the opposite direction.

Nobody ever tapped me on the shoulder, and asked, hey bud, look outside, do you like all those strip malls and condos we built?

Everywhere you go, and I mean all over the world now, it's the same boring logos of familiar corporations like McDonalds....stores we don't need, homes and condos nobody can afford and doesn't have any attraction to my eye.

Give me a nice, peaceful, natural stream that hasn't been polluted by some wacko corporation.

Friends, they over-built and expected people to keep buying them up as they were losing their jobs by the thousands.

Something had to give, and indeed, from the looks of things, it certainly did.

Twenty eight years of Reaganomics, and it comes to a screeching halt.

From Daddy Bush calling it "voodoo economics", to junior Bush inheriting the mess.

One day, capitalism will get it right.

Ohhh right, well that certainly clears it up.

Me personly? Ok, well as it's still early days (and I do think the affects will be around for a few years) the only change has been petrol got cheaper!

The Treasury Secretary said the other day that the U.S. economy won't start turning around until the end of next near.

A full recovery may take much, much longer--perhaps decades.

The New York Times
October 10, 2008

How Long Before the Market Bottoms?
By Catherine Rampell

With markets plunging for a week straight, investors of all stripes are wondering when the descent will end — and therefore when they should start buying again. Previous market cycles can help put this question in historical perspective.

As David Leonhardt wrote Thursday, the only times in the last century that we’ve seen year-over-year declines like the one realized this week were in the 1930s and the 1970s. So how long did it take for the markets to reach their bottoms then? Let’s take a look at the very helpful (and publicly available) monthly S.&.P. 500 data kept by Robert Shiller.

Before the Great Depression, the market peaked in September 1929. In inflation-adjusted prices, it took three years — until June 1932 — for the market to stop dropping and start rising again.

Before the bear market of the 1970s, the S.&P. 500 peaked in December 1968. In inflation-adjusted prices, it took six years — until December 1974 — for the market to bottom out.


To put this in context for today’s business cycle: After the tech bubble’s burst, the S.&P. 500 saw a peak in October 2007. We’re now only a year out; depending on how much stock (no pun intended) you put in these historical comparisons, it looks like we still have a few years to go. (Note: The peak of the stock market during the tech bubble, in 2000, was higher than the peak in October 2007; but which peak you think is more relevant depends on whether you consider the current business cycle an extension of the one that encompassed the tech boom and bust, or a new cycle following that of the tech boom and bust.)

Some may also wonder how long it will take the market to “recover.” It depends exactly what is meant by “recover,” of course, but one measure might be when the market returns to its precrash peak. The historical data is somewhat more distressing in this context.

After the Great Depression, it took 29 years — until 1958 — for the market to reach its pre-Depression, inflation-adjusted peak. After the 1970s recession, it took 24 years — until 1992 — for the market to make a full “recovery” by the same measure. So no matter whether you start from the recent 2007 peak, or from the market’s absolute inflation-adjusted peak during the tech bubble in 2000, we may still have at least a decade to go before full “recovery.”

http://economix.blogs.nytimes.com/2008/10/10/how-long-before-the-market-bottoms/?em

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I guess we are all going to need a lot of patience, and stamina. It's going to be a long, bumpy ride.

It appears that the Obama/Biden Healthcare program will focus mainly on preventive measures.

It may be a wise idea for you good folks in Great Britain to find ways in which you can improve your situations so that the dreaded expense of healthcare can be avoided.

I say this in all candor, not knowing how you are doing physically.

With all the turmoil going on, it helps not to compound it with health problems.

To all, best of health!

Chelseabelle, at this point, I guess your question can be placed into two separate categories....

The general economy vs. the behavior of the markets.

I'm feeling that many people may have given up on their investments, and don't care to discuss the unsettling conditions that have evolved.

Stock market gyrations are head spinning, with no clear direction except a noticeable downward trend.

Business, in general, very weak.

Many bankruptcies prevailing.

And yet, governments have begun bailouts, sending a message that they will make business work again, even though the business of late is highly questionable on ethics and values.

Therefore, I have questions.

Where is all this money coming from? I mean, it was widely known that printing money in excess could lead to economic failure.

Why has that long standing belief suddenly changed?

And, instead of doling out money and buying up failing banks, what can governments do to keep people employed in meaningful and rewarding career jobs?

The message I read in the bailout package is that the U.S. government will buy anything that nobody wants, which is mind boggling in that the essense of free trade is to buy the best at the best price.

I'd appreciate very much anyone's input as to what goes in these wacky times.