"Black Monday".... 2nd Great Depression has begun.

DoubleD · Senior Member

"Black Monday".... 2nd Great Depression has begun.

mirkwood · Senior Bucketkeeper

RE: Will we have another "Black Monday"

Cocobeem · Keeper of the Holy Grail

Do I need to turn on the news?

(clueless)

arbilad · Head Chef

Coco, Lehman Brothers filed for bankruptcy and Merril Lynch was bought out by Bank of America to keep Merrill Lynch solvent.

Pt314 · Senior Member

I just read that this is probably going to lead to 1000+ bank closings.

Scary.

coolcucumbers · Senior Member

wow.

arbilad · Head Chef

Pt314 wrote:

I just read that this is probably going to lead to 1000+ bank closings.

Scary.

If true, then FDIC won't save your money in your bank account. Their reserves have already been tapped a lot by the 11 bank closings we've had so far this year. But even assume the amount they had before they bailed out Indy Mac: $52 billion dollars. That's not enough to bail out 1000 banks, even at the lowest sum I've seen for a bank's deposits, $56 million. Even if every bank that failed was that tiny, a thousand of those would be $56 billion.

Cocobeem · Keeper of the Holy Grail

Zions is up. Stick with the Lord, people.

I just had a lady call me wondering if I'd take her two Arabian horses for free. I said no. (They're free until you get them home.) People are feeling it all over already.

Jen · Senior Bucketkeeper

Pt314 wrote:

I just read that this is probably going to lead to 1000+ bank closings.

Scary.

Link or source?

arbilad · Head Chef

They have some financial news channel on the TV at work right now. The talking heads sound scared.

arbilad · Head Chef

BTW, I found this reference for 1000 banks failing. CNBC is a pretty mainstream source. That doesn't guarantee that it will happen by any stretch of the imagination. But you don't need a tin foil hat, IMHO, to think that there are serious problems in the financial markets.

Pt314 · Senior Member

Jen wrote:

Pt314 wrote:

I just read that this is probably going to lead to 1000+ bank closings.

Scary.

Link or source?

http://www.cnbc.com/id/26710362

Not to say that it will happen.

Jen · Senior Bucketkeeper

Yeah, the article doesn't sound as doom and gloom as all of that:

"I do think a lot of the regional ones will (close), just as they did in the last savings and loan crisis in the 1990s," Ross said.

Not good, but not catastrophic. What WOULD be a problem is if everyone flipped out and withdrew all their money.

arbilad · Head Chef

The difference is that the savings and loan institutions weren't federally insured. The government stepped in anyway, but in the case of banks, they'd be required to step in and help out.
But you're right; a run on the banks would precipitate the very crisis that those people would be taking their money out to avoid. And it's not unlikely to happen. There was a run on Indy Mac before it closed its doors, even though it was federally insured.

arbilad · Head Chef

The Dow Jones slid 504 points today. Let's see if it recovers tomorrow.

Organist · Senior Member

Are any of you bargain hunters? Now is the perfect time to buy! Imagine what it will be worth in 20 years when you retire.

Or, if you are a bit more timid, don't want to keep your money in cash form. Put it into durable objects, like food storage, generators, land (in a low property tax area), and similar things.

arbilad · Head Chef

Organist wrote:

Are any of you bargain hunters? Now is the perfect time to buy! Imagine what it will be worth in 20 years when you retire.

Or, if you are a bit more timid, don't want to keep your money in cash form. Put it into durable objects, like food storage, generators, land (in a low property tax area), and similar things.

I don't know - it seems too much like gambling to me (I'm not saying it's immoral, I'm just saying it's risky). Up till a few weeks ago, you could have made a very strong case for Lehman Brothers being a bargain stock. It's a company that's been around for 158 years, fourth largest investment bank, and some successful subsidaries. But that one went bad quickly.

How do you know that any of the stocks that are selling cheaply now will be around in 20 years? After all, most of the Fortune 500 from the 70s are no longer around. How do you guess which stock will still be there?

Cocobeem · Keeper of the Holy Grail

I agree with arbi. I don't trust the stock market as far as I can throw it. If it's just "extra" money... fine. If you're depending on it for retirement or anything else... forget it.

Food storage and real estate. (Bought with cash.)

Cocobeem · Keeper of the Holy Grail

Another thing with Lehman... their FIRST ever reported quarterly loss came just last June. No kidding. Losing to annihilation in three months. Nice.

LoudmouthMormon · Profuse Pontificator

Let's try to keep our sense of history about us when talking about this stuff...

A valid point of comparison is the Savings & Loan crisis of the 1980's. That happy little issue resulted in the FSLIC or the RTC closing over a thousand financial institutions, holding $519 billion in assets. In other words, today's crisis is starting to get as big as the crisis of the '80's. America didn't fall off the end of the earth then, and it won't now.

I remember my parents had $$ in some dinky S&L that went belly up, they didn't lose a single dime.

LM

-- Edited by LoudmouthMormon at 11:26, 2008-09-16

arbilad · Head Chef

I think that there are some distinct differences. The S&Ls, from what I understand, didn't have major deposits from or loans to major foreign banks. One of the reasons they decided to save Fannie Mae and Freddie Mac is that other governments would have lost a lot of money and been unhappy with us. I heard (but can't back up until I find a reference) that the equivalent of 10% of China's GDP was invested by them in Fannie Mae and Freddie Mac.

Organist · Senior Member

Since the people (government) now owns Freddy and Fannie, can we sell it to China in exchange for our debt? What a way to wipe out the national debt, to be slowly repaid by all those homeowners diligently paying their mortages.

Cocobeem · Keeper of the Holy Grail

What was the headline on msn.com yesterday? Something about Government playing Sugar Daddy ... gave me the creeps.

(Had to do with the AIG thing.)

DoubleD · Senior Member

We have over $46,000 in an annuity with AIG.

I'm hoping it will still be around at maturity.

Cocobeem · Keeper of the Holy Grail

The Fed is really up to something.

DoubleD · Senior Member

Cocobeem wrote:

The Fed is really up to something.

Rothschilds, Binderburg group? Backing Obama???

Jen · Senior Bucketkeeper

It's the Pentavaret, who run everything in the world, including the newspapers, and meet tri-annually at a secret country mansion in Colorado, known as The Meadows. . . The Pentavaret consists of The Queen, The Vatican, The Gettys, The Rothschilds, *and* Colonel Sanders before he died.

lundbaek · Profuse Pontificator

Something for consideration:

Ron Paul Blasts Secret Government Running Economy

Congressman warns middle class in danger of being wiped out, says
Congress is oblivious and Fed has no clue

Steve Watson
Thursday, Sept 18, 2008

Congressman Ron Paul has issued a stinging address concerning the
financial crisis in which he outlines how the current economic problems,
created via malinvestment and shift to a debt based economy, are now
being mismanaged by private interests in secret.

Whats more he says he is not sure the Federal Reserve has any idea
what to do next and that the Congress is totally oblivious to the whole
sorry state of affairs - a cocktail of elements he warns puts the middle
class of America in serious jeopardy.

Today we had a lot of financial fireworks in the markets, a lot of
things are going on, and I think we are in the middle of something very
big. the Congressman stated.

Speaking on the recent collapse and government bailout of several big
financial institutions he warned:

Were talking about big bucks, were not talking about hundreds
of millions or even hundreds of billions, were talking about
trillions of dollars, the obligation is immeasurable.

The interesting thing is that they (the financial institutions)
dont come to the Congress, I mean the Federal Reserve buys them
out, they own it. We as tax payers now own Fannie Mae and Freddie Mac
and know one knows how much that will cost. They dont come to the
Congress, we dont have appropriations, its done by secret
government, private individuals behind the scenes maneuvering and
manipulating and trying to patch things up. While in the meantime, Im
sure theres a few people making a couple of bucks out of this whole
thing.

The Congressman highlighted how an economy structured on debt and
credit and a financial system based on interventionism and self serving
moral hazard has led to gross devaluation of the dollar and ultimately
lies at the root of the current financial meltdown.

Our problems come first of all from the Federal Reserve. It is a
monopoly and it controls interest rates artificially low, causes people
to make mistakes, thats the basic source. But then on top of that in
the Housing market we had the community reinvestment act which told
investors that they had to loan to risky borrowers, and that was a risky
complication. HUD contributes to this, FDIC contributes, its called
moral hazard, everything that we have done over here creates moral
hazard, that is we assure people or assume that we will take care of
everybody, just go out and create the risk, it is the opposite of the
market place. Paul stated.

You cant create money like were doing in order to support the
dollar, because ultimately it hurts the dollar and everything we do in
Washington today whether its on the appropriations side, whether its
what the Fed is doing, buying up America, its all putting pressure on
the dollar. One of these days were just going to have to wake up and
say that we need to liquidate debt. This is malinvestment. he urged.

The Congressman then slammed those who have blamed the crisis on
failures of the free market:

And then they have people come along and say see, this is the
failure of capitalism, this has nothing to do with capitalism, this
is something that started off as interventionism and us being too
involved in the economy for the benefit of special interests. But now it
is being socialized out in the open.

The end of this comes when people reject the dollar and I think
were getting awfully close to this. Paul stated echoing
comments from leading investors such as Jim Rogers, who predicted Monday
that the dollar would soon lose its world reserve status.

When you see the movement in the markets that we have today, you
know that there are serious problems out there and Congress basically
are oblivious, they have no idea whats going on. Paul continued.

As a matter of fact Im not even sure the Federal Reserve has any
idea what to do about this. Theyve been manipulating and maneuvering
for their own benefit over the years but eventually the market wins
out.

The Congressmans comments were echoed today by reports indicating
that the Congress cannot agree on any form of action and is likely to
simply adjourn and get out of the way.

Senate Majority Leader Harry Reid told reporters that no one knows
what to do.

In a stark warning, Ron Paul stressed that the longer the value of the
dollar is allowed to depreciate, the greater the risk becomes for the
majority of Americans:

The reason this is so important is that if you care about people in
a humanitarian sense, what you want to do is protect the value of the
money. Just think of the third world nations when they have total run
away inflation, the middle class gets wiped out. And what we are seeing
today is the middle class being jeopardized by this type of system that
we have, unlimited spending, unlimited debt, unlimited creation of new
credit.

So its time that we wake up The answers are in the free market,
sound money and our Constitution. Paul concluded.

Organist · Senior Member

Loss of property rights a couple of years ago. Immoral and unjust war. Transfers of wealth. Entitltement programs and attitudes. Celebration of immorality. And now trillions of imaginary taxpayer dollars to the bankers.

Our government needs to be pruned down to the ground.

lundbaek · Profuse Pontificator

The goals of the Constitution Party include:

*the end of the wars in Afghanistan and Iraq and return of US forces to the United States;

*a halt to further increases in social welfare, which is unconstitutional, and opposition to renewal of such programs as they expire (an immediate and complete shutdown is unfeasable);

*opposition to any law or program that takes wealth from one person and transfers it to another person or interest group (including failing businesses);

*definition of Family as one husband and one wife with their children as divinely instituted;

*right to life for all human beings, from conception to natural death;

*freedom of conscience and actions for the self-governed individual;

*right to own and steward personal property without government burden;

*the Bill of Rights interpreted according to the actual intent of the Founding Fathers;

*everything not specifically delegated by the Constitution to the federal government to by reserved for the state and local jurisdictions;

*American government committed to the protection of the borders, trade, and common defense of Americans, and not entangled in foreign alliances.

John Quincy Adams said, " Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost."

In my own campaign for Congress (Arizona 5th Congressional District) I am continually dismayed at the huge % of LDS who are unaware of their responsibility to "befriend" the US Constitution, and what's worse, do not want to know.

arbilad · Head Chef

I notice that yesterday they were saying that the bank rescue organization would cost the gubment 500 billion, and today they're saying 700 billion. What are a few billion amongst friends?

lundbaek · Profuse Pontificator

Now the Fed is buying an insurance company? Where exactly is that covered in the Federal Reserve Act? The Federal Reserve has the power to print the national money supply granted IN VIOLATION OF THE CONSTITUTION, but it is not actually a part of the U.S. government. It is a private banking corporation owned by a consortium of private banks. The banking industry just bought the worlds largest insurance company, and they used federal money to do it. (Federal money, hell. That money comes out of our pockets.) What had to be saved at all costs was not housing or the dollar but the financial derivatives industry.

http://www.webofdebt.com/articles/its_the_derivatives.php

Organist · Senior Member

I listened to Henry Paulson on all the Sunday morning news shows and I don't trust a word he said. "Urgent" "Do it now" "No time for debate" "The cost of not doing this is far greater than the cost of doing it". Urgency is how they passed the Patriot Act. Several years ago Washington State got the voters to approve a sales tax increase to fix the Alaskan Way Viaduct because it was "about to fall down", yet they haven't done anything to fix it yet.

When a politician begins to tell me that they urgently need more power and money, that there is no time to debate or read the fine print, that all is lost if this doesn't happen immediately, then I immediately want to slow everything way down. The only thing that is that urgent is an actual attack on US soil. All else can handle debate.

I have decided that the Soviet Union won, because with all our loss of freedoms, land ownership rights, entitlement programs, and now the federal takeover of our important banking institutions, we are more socialist than they ever were.

LoudmouthMormon · Profuse Pontificator

Update to my prior post comparing current events to the S&L bailout:

Comparing the two events in different ways:
1989 bailout of $126bn* = 2.9% of GDP
Assume a trillion bailout for current crisis = 7.2% of GDP
(translation - it's a more expensive problem)

S&P500 drop in 2000-01: 40% drop
S&P500 drop from Nov-today: 26% drop
(translation - stocks have to lose another 15% before this event is as bad as the '00-'01 recession)

LM

arbilad · Head Chef

I really hope that we're not actually in a bad financial crisis. If we're not in a bad financial crisis, though, the talking heads are not inspiring confidence by talking about "the worst financial situation since the great depression".

Cocobeem · Keeper of the Holy Grail

This feels a lot worse than 00-01. Maybe cuz the Fed is so openly involved now or something...

I think the lowering gas prices are keeping a lid on this pot for now. If gas shot up to $7 a gallon, people would be FREAKIN' out.

DoubleD · Senior Member

The snow ball has left Alta and is headed down the canyon, there is no stopping it now.

The 2nd great depression at this point is inevitable.

The next 14 years will be hard, even for those who survive.

Dollar is now worthless. Should have bought as many Euros as possible LAST WEEK.

Oil shot up $25 a barrel yesterday.. that means $7 a gallon by Christmas.

There is a slow motion run on banks at present. I talked to my banker yesterday and he's never seen so many people withdrawing cash from savings... and he said it is snowballing.

Get more flour, rice, beans etc... now. They will be the future money.

Be ready to share or protect what you have.

It's gone beyond "Black Monday" now. The genuine, honest to goodness DEPRESSION has begun.

There you have it.

arbilad · Head Chef

RE: "Black Monday".... 2nd Great Depression has begun.

Jen · Senior Bucketkeeper

Why 14 years?

Cocobeem · Keeper of the Holy Grail

I keep thinking I'll "rue the day" I didn't buy more provisions when I could have.

I was talking with a lady at work last night and she believes there are bad times coming... you shouldn't make any purchases unless you absolutely have to... as far as "extras" go. She's buying more food storage and canning a lot at the Church cannery. She's single and believes in the Church although she's not stringent on attending Sunday meetings. Then she commented that she'd almost rather be dead than go through these hard times. I totally can't relate to that. I guess some people can.

I want to get a bicycle with those solid tires that never get a flat. My two oldests already have those tires on their bikes.

mirkwood · Senior Bucketkeeper

I've considered a couple of good mountain bikes and spare parts.

Cocobeem · Keeper of the Holy Grail

And the horses, of course...

hiccups · Future Queen in Zion

And BBQ sauce for the horse, of course?

arbilad · Head Chef

C'mon, everyone knows that you need Worcestershire sauce for a horse!

mirkwood · Senior Bucketkeeper

arbilad wrote:

C'mon, everyone knows that you need Worcestershire sauce for a horse!

Cocobeem · Keeper of the Holy Grail

You guys are lame.

hiccups · Future Queen in Zion

Yeah, but when the stuff hits and the horse goes lame, you'll be wishing you'd listened and stored some sauce.

arbilad · Head Chef

There are a lot of things I still want to get for storage.
I think that probably everyone who is a regular poster here is at least trying to get their food supply.

lundbaek · Profuse Pontificator

Excerpts from http://www.newswithviews.com/baldwin/baldwin471.htm

I wish every member of this forum, past and present, would read this entire article by Pastor Chuck Baldwin, and not just the excerpts.

"At the time of this writing, the U.S. House and Senate are poised to pass a $700 billion bailout to Wall Street. At the behest of President George W. Bush, the U.S. taxpayers are going to be on the hook for what can only be referred to as the biggest fraud in U.S. history.

"Virtually our entire financial system is based on an illusion. We spend more than we earn, we consume more than we produce, we borrow more than we save, and we cling to the fantasy that this can go on forever. The glue that holds this crumbling scheme together is a fiat currency known as the Federal Reserve Note, which was created out of thin air by an international banking cartel called the Federal Reserve.

"According to Congressman Ron Paul, in the last three years, the Federal Reserve has created over $4 trillion in new money. The result of all this "money-out-of-thin-air" fraud is never-ending inflation. And the more prices rise, the more the dollar collapses. Folks, this is not sustainable.

"Already, Bear Stearns was awarded a $29 billion bailout, followed quickly by the bailout of Freddie and Fannie that will cost the taxpayers up to $200 billion. Then the Fed announced the bailout of AIG to the tune of $85 billion. Mind you, AIG is an enormous global entity with assets totaling more than $1.1 trillion. Moreover, the Feds agreed to pump $180 billion into global money markets. And the Treasury Department promised $50 billion to insure the holdings of money market mutual funds for a year. Now, taxpayers are being asked to provide $700 billion to Wall Street. (I hope readers are aware that, not only will American banks be bailed out, but foreign banks will also be bailed out. Then again, at least half of the Federal Reserve is comprised of foreign banks, anyway.) In other words, the Federal Reserve is preparing to spend upwards of $1 trillion or more. Remember again, this is fiat money, meaning it is money printed out of thin air."

"All of this began when the U.S. Congress abrogated its responsibility to maintain sound money principles on behalf of the American people (as required by the Constitution) and created the Federal Reserve."

"The only way to fix this economic mess that the international bankers have created is to return America to sound money principles, as prescribed in the U.S. Constitution. "

Cocobeem · Keeper of the Holy Grail

I am RUN-NING (a la Forrest Gump) to Macey's right NOW!