Everyone likes to see the big guy get knocked down a peg or two.

 Quote: Alyssa Myracle

Everyone likes to see the big guy get knocked down a peg or two.

OR TEN!

 Quote: Alyssa Myracle

Lenders are required to give a certain percentage of home loans to low income households. Basically, they've been forced by Uncle Sam to give bad loans to people, just to satisfy their government mandated quota. That's a big part of why you see such glaring inequity in the market.

I think that this may have contributed to the mess we're in now, but I'd be willing to bet that it's not the major reason.

Lenders were willing to lend practically anyone money, and I'm not talking about low income housing loans here. There was just a segment on 60 Minutes about the parties that developers in Miami Beach would throw for potential property buyers, and these buyers would come armed with pre-approved adjustable rate mortgages and buy, buy, buy. According the the analysts that were interviewed, we are about halfway through this foreclosure mess in the SFH sector, with another enormous amount of adjustable rate loans getting ready to adjust in 2008. And then the commercial property loans will soon follow...

These buyers weren't low income; but they would never have been able to qualify for a conventional loan for the amount they wanted to borrow.

Mortgage brokers and lenders pushed these dicey loans on anyone that was willing to sign on the dotted line. And people were ignorant or shortsighted or greedy enough to take them...

And that, IMO, is due to lack of regulation, not overregulation.

And now we are all paying the price...

Well. I am worried a bit about the economy so I have bought veggies and fruits to grow them in my backyard. I have tomato, cucumber and avocado, so I'm trying to grow strawberries and blueberries. They are pretty hard to grow though. The price of veggies and fruits are getting really expensive now.

I am trying to save extra money so I don't need to buy veggies or fruits from the store. I can use it to spend on milk, bread, and other items.

 Quote: Lynne Barrows

There was just a segment on 60 Minutes about the parties that developers in Miami Beach would throw for potential property buyers, and these buyers would come armed with pre-approved adjustable rate mortgages and buy, buy, buy.

What 60 Minutes barely managed to touch on was the Commodity Futures Modernization Act of 2000- for all their coverage, they failed to ask the crucial question: why was the CFMA needed?

Essentially, financial firms had been so overregulated by both state and federal regulations, that they sought (and successfully received) exemption under the CFMA, creating an unregulated market. In other words, overregulation led to NO regulation at all.

At the root of the whole mess is Credit Default Swaps, which have been completely unregulated since 2000, as a backlash of previous over-regulation of other types of transactions.

Overregulation essentially created a black-market of financial transactions. Since the companies could no longer function under oppressive and outdated regulation, they simply found completely unregulated ways around the troublesome laws, and ran amok.

 Quote: Lindsay Janes

Well. I am worried a bit about the economy so I have bought veggies and fruits to grow them in my backyard. I have tomato, cucumber and avocado, so I'm trying to grow strawberries and blueberries. They are pretty hard to grow though. The price of veggies and fruits are getting really expensive now.

I am trying to save extra money so I don't need to buy veggies or fruits from the store. I can use it to spend on milk, bread, and other items.

Good call.
Consider investing in canning equipment so that you can preserve excess produce when it comes time to harvest.

Virtually anything can be jammed, jellied, pickled or otherwise preserved and jarred.

 Quote: Alyssa Myracle

Overregulation essentially created a black-market of financial transactions. Since the companies could no longer function under oppressive and outdated regulation, they simply found completely unregulated ways around the troublesome laws, and ran amok.

And who was watching the shop? Apparently noone.

I heard a segement on NPR about credit default swaps; wow, what an eyeopening clusterxxxk that was. Here's an explanation of credit default swaps, if anyone cares.
http://www.zacks.com/stock/news/14884/Credit+Default+Swaps+Explained

Don't get me wrong; I am not for government intervention generally speaking, but it seems like we have run so far off course in all areas of our economy that the government has to intercede...

I honestly did not find myself rigidly opposed to the basic concept of the governement helping the loan market recover from their crisis, given that the government was largely to blame for the prediciment in the first place.

We paid a lot of lip service and printed a lot of money, but nothing really went where we were told it would- and I'll be damned if I'll support a Detroit bailout.

speaking of which, here's an article on:
http://www.economist.com/business/displayStory.cfm?story_id=12833915&source=features_box_main

now that this has come, the canadian and ontario governments are expected to announce a bailout package tomorrow worth $4.16B.

i'm torn - why bail out companies that utterly failed at meeting changing market demands? but they think in canada alone that if the auto industry (mostly in ontario) fails, it could mean about half a million jobs lost due to a cascade effect. which boggles my mind.

It's not as black and white as bail out the auto makers or they fail- despite what certain sectors of the media and political sphere would like you to believe.

Like all businesses, they have the option to restructure under Chapter 10 bankruptcy.

We have two choices-
Bail out the automakers. *Most* of the people working for the auto manufacturers and related industries get to keep their jobs, for now.

However, we don't have the money they want. The money just doesn't exist. SO, we keep on printing money, until the economy completely collapses. Then EVERYONE is out of a job.

Option #2, let the automakers work it out on their own. Let the bankrupt themselves, restructure and come back stronger if they choose. They aren't going to simply decide to fail. They're in the business of staying in business. When push comes to shove, they'll restructure and find a way to make it work, without bankrupting the entire country in the process.