# The sky is falling - so what's next



## highplains (Oct 5, 2006)

So everyone had AIG on the radar. Wamu is waiting in the wings... has anyone else heard of others waiting to perform their swan dives on Wall Street?

This every 2-3 weeks of some giant company that is bankrupt is getting just plain silly.

Hope everyone on the board is having things go well , I think '09 is going to be bad as well, at least the first quarter.


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## Guest (Sep 17, 2008)

I figure there's a conga line of larger and smaller companies waiting to go bust, but they are being made known only a few at a time lest too many going bust at once causes a panic. They have to dole them out carefully or the herd will spook out of control.

.....Alan.


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## FUNKY PIONEER (Sep 20, 2005)

Merrill Lynch, UPS, JP Morgan, I suspect several auto makers and they are saying minimum of 1000 banks (translated into at least 5 time that) All rumors that I have heard.


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## radiofish (Mar 30, 2007)

Well I bank primarily with Washington Mutual - so should I move my funds out of there A.S.A.P.????

I know of the FDIC insurance on checking and savings accounts up to $100,000.00 dollars, but how long would it take for me to be reimbursed if WaMu folds up their tents and closes their doors?? 

How about my Federal direct deposit into one of my accounts? 

Luckily, I have a fixed interest rate land contract with a private individual, instead of the usual variable APR mortage with a bank!!

Makes me wonder about my one Master Card that is issued with WaMu.. Will they call in the entire debt (less than $500.00 dollars) at that time???

I think that manana, I will get some cash and maybe bury it in a mason jar - just in case this occurs with WaMu... I was just in a local branch of WaMu yesterday, and it seemed business as usual as I got a Cashier's Check for my October land payment..


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## FUNKY PIONEER (Sep 20, 2005)

Umm yes, WaMu I would have pulled my money long ago. Don't count on the FDIC to bail you out. The last bank that they dug out they issued checks to people and those people had problems finding a bank that would cash them. If WaMU fails, just kiss your money bye bye.


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## Razorback21 (May 13, 2003)

A.T. Hagan said:


> I figure there's a conga line of larger and smaller companies waiting to go bust, but they are being made known only a few at a time lest too many going bust at once causes a panic. They have to dole them out carefully or the herd will spook out of control.
> 
> .....Alan.


Spooking the herd is a good analogy. The FDIC does not announce bank seizures until Friday AFTER the market closes. They are basically seizing one or two at a time. When you start seeing, like five at a time, you have to start questioning the financial stability of main street. I think we have seen enough lately to state that there is a definite lack of capital in the financial markets right now. Lehman, Merrill and AIG....should I go ahead and start panicking now?!!!!!!


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## radiofish (Mar 30, 2007)

I hate BofA so they are not an option. 
Maybe I will go open an account or two with US Bank or Wells Fargo tomorrow, and do the monetary shuffleboard game!!!
Or maybe I will go and bury a case of currency filled mason jars on the property....... Need to make a treasure map, if I do that!!!!

And here I thought that the State of California still not having a State Budget/ the latest vetoed by our Governator Ahnold yesterday, was the looming crisis here in California!!!


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## Aintlifegrand (Jun 3, 2005)

radiofish said:


> I hate BofA so they are not an option.
> Maybe I will go open an account or two with US Bank or Wells Fargo tomorrow, and do the monetary shuffleboard game!!!
> Or maybe I will go and bury a case of currency filled mason jars on the property....... Need to make a treasure map, if I do that!!!!
> 
> And here I thought that the State of California still not having a State Budget/ the latest vetoed by our Governator Ahnold yesterday, was the looming crisis here in California!!!


Wells Fargo would be a good choice _for now_..just stay informed...and never have more on deposit than covered by FDIC...


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## seedspreader (Oct 18, 2004)

Ok, my question is different. I have a credit debt (thank you self-employment) with WaMu... what happens if they go under? Someone buys the debt and then I start the merry go round of people buying it and selling it and me trying to figure out who to pay???


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## FUNKY PIONEER (Sep 20, 2005)

* WAMU BEGINS AUCTION TO SELL ITSELF*
Just crossing the ticker on CNBC
__________________
Awareness is Everything


Large headline on MarketWatch:

http://www.marketwatch.com/news/stor...302430FE9BB}


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## Aintlifegrand (Jun 3, 2005)

seedspreader said:


> Ok, my question is different. I have a credit debt (thank you self-employment) with WaMu... what happens if they go under? Someone buys the debt and then I start the merry go round of people buying it and selling it and me trying to figure out who to pay???


I am expecting WaMu to join with JP Morgan


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## Aintlifegrand (Jun 3, 2005)

FUNKY PIONEER said:


> * WAMU BEGINS AUCTION TO SELL ITSELF*
> Just crossing the ticker on CNBC
> __________________
> Awareness is Everything
> ...



Okay.. that makes sense now... thanks


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## FUNKY PIONEER (Sep 20, 2005)

deral bank insurance fund dwindling

By MARCY GORDON, AP Business Writer Tue Sep 16, 7:49 PM ET

WASHINGTON - Banks are not the only ones struggling in the growing financial crisis. The fund established to insure their deposits is also feeling the pinch, and the taxpayer may be the lender of last resort.


The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation's largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday.

Treasury has already come to the rescue of several corporate victims of the housing and credit crunches. The government took over mortgage finance companies Fannie Mae and Freddie Mac, and helped finance the sale of investment bank Bear Stearns to J.P. Morgan Chase & Co.

Eleven federally insured banks and thrifts have failed this year, including Pasadena, Calif.-based IndyMac Bank, by far the largest shut down by regulators.

Additional failures of large banks or savings and loans companies seem likely, and that could overwhelm the FDIC's insurance fund, said Brian Bethune, U.S. economist at consulting firm Global Insight.

"We've got a ... retail bank run forming in this country," said Christopher Whalen, senior vice president and managing director of Institutional Risk Analytics.

Treasury Secretary Henry Paulson said Monday that the country's commercial banking system "is safe and sound" and that "the American people can be very, very confident about their accounts in our banking system." FDIC officials also have said 98 percent of U.S. banks still meet regulators' standards for adequate capital.

But fear is growing on Main Street as well as Wall Street about the likelihood of multiple bank failures and the strain that would put on the FDIC.

The fund, which is marking its 75th anniversary this year with a "Face Your Finances" campaign, is at $45.2 billion â the lowest level since 2003. At the same time, the number of troubled banks is at a five-year high.

FDIC Chairman Sheila Bair has not ruled out the possibility of going to the Treasury for a short-term loan at some point. But she has said she does not expect the FDIC to take the more drastic action of using a separate $30 billion credit line with Treasury â something that has never been done.

The FDIC's fund is currently below the minimum set by Congress in a 2006 law. The failure of IndyMac Bank in July cost $8.9 billion.

Next month, Bair plans to propose increasing the premiums paid by banks and thrifts to replenish the fund. That plan is likely to be approved by the FDIC board, which consists of her, Comptroller of the Currency John Dugan, Thrift Supervision Director John Reich and two other officials.

Bair also is considering a system in which banks with riskier portfolios would be charged higher premiums, raising the possibility those costs could be passed on to consumers.

A Washington Mutual failure would dwarf the largest bank collapse in U.S. history â Continental Illinois National Bank in 1984, with $33.6 billion in assets.

By comparison, WaMu and its subsidiaries had assets of $309.73 billion as of June 30 and IndyMac had $32 billion when it shut down.

Arthur Murton, director of the FDIC's insurance and research division, said that when large institutions have failed in recent years, the hit to the fund has been about 5 to 10 percent of the company's assets.

Standard & Poor's Ratings Service late Monday cut its counterparty credit rating on WaMu to junk, action that followed downgrades by both Moody's and Fitch last week. Concern about the Seattle-based thrift, which has significant exposure to risky mortgage securities and other assets, has grown in recent weeks, and the company's stock price has plummeted.

WaMu responded Monday by saying that it did not expect the S&P downgrade to have a material impact on its borrowings, collateral or margin requirements. The bank said its capital at the end of the third quarter on Sept. 30 is expected to be "significantly above" required levels and that its outlook for expected credit losses is unchanged.

Some analyst estimates put the cost of a WaMu failure to the FDIC at more than $20 billion, but other experts say it is very difficult to predict. Unknown, for example, is the amount of advances that institutions may have taken from one of the regional banks in the Federal Home Loan Bank system. Banks and thrifts have significantly increased their requests for advances, or loans, from the 12 regional home loan banks since the mortgage crisis began last year.

These amounts aren't publicly disclosed but must be repaid if a bank or thrift fails, notes Karen Shaw Petrou, managing partner of Federal Financial Analytics.

If the FDIC doesn't have enough cash to cover the initial costs of a bank or thrift failure, one option would be short-term loans from the Treasury. That last happened in 1991-92, during the last part of the savings and loan crisis, when the FDIC borrowed $15.1 billion from the Treasury and repaid it with interest about a year later.

Based on projections of possible scenarios of bank failures, "between the (insurance) fund that we have now and our ability to draw on the resources of the industry ... we do have the resources" needed, Murton said Tuesday.

Though short-term borrowing from Treasury for working capital may be possible, he said, tapping the long-term credit line is unlikely.

But Whalen said the Federal Reserve, the Treasury and Congress should "immediately devise" and announce a plan to backstop the FDIC with up to $500 billion in borrowing authority to meet cash needs for closing or selling failed banks.

"While the FDIC already has a credit line in place and this figure may seem excessive â and hopefully it is â the idea here is to overshoot the actual number to reinforce public confidence," Whalen wrote in a note to clients. "Simply having Treasury Secretary Hank Paulson or Ben Bernanke making hopeful statements is inadequate. Like it says in the movies: 'Show us the money.'"

Before Congress passed the law overhauling deposit insurance in 2006, about 90 percent of all insured banks and thrifts â considered to have adequate capital and to be well managed â paid no premiums to the FDIC. Today, all of them do.

There were 117 banks and thrifts considered to be in trouble in the second quarter, the highest level since 2003, according to FDIC data released last month. The agency doesn't disclose the names of institutions on its internal list of troubled banks. On average, 13 percent of banks that make the list fail. Total assets of troubled banks tripled in the second quarter to $78 billion, and $32 billion of that coming from IndyMac Bank.

Last month, Bair called those results "pretty dismal," but said they were not surprising given the housing slump, a worsening economy, and disruptions in financial and credit markets. "More banks will come on the (troubled) list as credit problems worsen," he said. "Assets of problem institutions also will continue to rise."

[link to news.yahoo.com]


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## pickapeppa (Jan 1, 2005)

Of course, he's just tossing out a figure here - $500 million.

Um, sure.

:help:

How big is that derivatives market?


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## rickd203 (Sep 11, 2005)

From what I'm reading, I need to really step up my bug out plans. My truck is almost ready for a long trip. The food supply is good. I don't think my pistol permit will get here in time but I should be able to find a mini-30 if I move fast. If you see a brown Mazda pickup with a forest green canoe on top, don't shoot. I'm not a looter.


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## uyk7 (Dec 1, 2002)

You can rate your bank here: http://www.bankrate.com/brm/safesound/ss_home.asp




.


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## FUNKY PIONEER (Sep 20, 2005)

pickapeppa said:


> Of course, he's just tossing out a figure here - $500 million.
> 
> Um, sure.
> 
> ...


The derivatives market is estimated a 1,000 TRILLION dollars. No one wants to back them because they are going to fail and all these banks are in these derivatives. They may pull a rabbit out of the hat, but it looks to me that the whole financial system is unwinding.......


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## hillsidedigger (Sep 19, 2006)

"The sky is falling - so what's next"

The Republicans chance of winning anything by the first Tuesday in November.


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## pickapeppa (Jan 1, 2005)

FUNKY PIONEER said:


> The derivatives market is estimated a 1,000 TRILLION dollars. No one wants to back them because they are going to fail and all these banks are in these derivatives. They may pull a rabbit out of the hat, but it looks to me that the whole financial system is unwinding.......


$1,000 trillion? I haven't heard it that high, but maybe 4 to 9 trillionish.

Was AIG insuring the derivatives market?


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## FUNKY PIONEER (Sep 20, 2005)

AIG as an insurance company insure a lot of things and yes they do insure these derivatives contracts, real estate contracts etc. This bail out will only prolong the pain, it will all collapse eventually.


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## Scott in Florida Panhandl (May 10, 2002)

Rally tomorrow, sell off Friday,-500pts, another financial institution crash over the weekend.JMHO


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## FUNKY PIONEER (Sep 20, 2005)

Futures are in the positive so you may be right. I'm thinking were looking at WAMU next then Wacovia, Morgan Stanley, Merrill Lynch, JP Morgan, and Bank of America following (not in that particular order)


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## Watcher48 (Aug 30, 2007)

pickapeppa said:


> $1,000 trillion? I haven't heard it that high, but maybe 4 to 9 trillionish.
> 
> Was AIG insuring the derivatives market?


Everybody is in the derivatives market. And no one knows how much anyone has got. over at the Market Ticker they were talking 260 -500 billion in derivatives for AIG

Check again. Pioneer is close to right. Last i was told it was 456 Trillion. The GDP of he entire world is around 56 trillion
9 trillion is what WE are on the hook for. truth be known. And i'm not talking national debt which is quickly approaching 1 trillion at the rate were bailing them out.


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## pickapeppa (Jan 1, 2005)

I'm having an Oh Sheet moment.


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## WolfWalksSoftly (Aug 13, 2004)

And so it begins.(at least what is being reported by the U.S. media anyway)

RF.....Better dip your bread in the gravy while it's still hot, its cooling off fast.


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## Andy Nonymous (Aug 20, 2005)

Watcher, I think you missed a zero - the national debt is rapidly approaching TEN trillion (a number soon to be surpassed, especially with Unc Sam playing fast and loose with "saving the (financial big-wigs) country", one bail-out at a time).

Gotta wonder - when Chevez "nationalized" the oil industry, he gave the corporations 60 days to divest themselves there. Here, what is a public corporation one day, is "for the good of the country" a national "asset" (or liability) the next. 

And where exactly is all that "money" coming from to pay these things off? It's borrowed, from the FedRes (with JP Morgan as one of the principles, as is Citi, and others). 

How ironic, if the banks that loan the money to the gov to pay for their extravagance, get bailed out by the gov, who again borrow the money from the very banks they are bailing out... (I'm sure it looks good on paper ), and even better:_* it's all on the backs of the tax payers to pay for*_. :happy: 
Hey, they (the taxpayers) haven't stopped their elected reps from continuing "business as usual" yet, and it's not likely, as when pinched (hard), they'll cry for _even more_, do anything to put the pain off till tomorrow, or to put it on someone, anyone else... "let the government pay the bill" (and fail to realize that YOU are still paying, and paying, with interest, for the privilege to have it 'properly administered'.

:doh:


:bdh:

The common men (and women and children) of the world are going to be up against a wall, and the biggest of the big will be laughing, "all the way to the bank".


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## pickapeppa (Jan 1, 2005)

That be the price of dumbing down the nation. We should look very closely at what gets taught in our schools. IMHO, there isn't enough practical knowledge being passed down on economics, history, mathematics, or government/business operations for your average high school grad to make logical decisions that are good for themselves.

Most keep voting for people who sing a song they like to hear, but pass legislature that works directly against their best interests.

If only they could see it.


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## stanb999 (Jan 30, 2005)

pickapeppa said:


> Most keep voting for people who sing a song they like to hear, but pass legislature that works directly against their best interests.
> 
> If only they could see it.


They aren't called Sheeple for nothing.


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## pickapeppa (Jan 1, 2005)

stanb999 said:


> They aren't called Sheeple for nothing.


Someone needs to sheer the wool out of their eyes.


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## Freeholder (Jun 19, 2004)

Scott in Florida Panhandl said:


> Rally tomorrow, sell off Friday,-500pts, another financial institution crash over the weekend.JMHO


Yes, I think you are correct. It's going to be little bumps up and big bumps down from here on out, IMO.

Kathleen


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## deuteronomy67 (Jul 3, 2008)

I didn't read ALL of the replies, so someone may have said this already. And quite honestly, some of this investment/stock market lingo is over my head.  ....But, has anyone else brought up, that as of Sept. 30th the US will be technically bankrupt? 

How does that affect the common man? 

Kind of reminds me of this passage...

Jer 51:6 Flee from the midst of Babylon; yea, each man deliver his soul. Do not be silenced in her iniquity. For it is the time of the vengeance of Yahoveh. He will give her a just recompense. He will repay her. 

Jer 51:7 Babylon was a golden cup in the hand of Yahoveh, making all the earth drunk. The nations have drunk of her wine, therefore the nations rage. 
Jer 51:8 Suddenly Babylon has fallen, and it is broken. Wail for her, take balm for her pain, if perhaps she may be healed. 

Jer 51:9 We would have healed Babylon, but she is not healed. Forsake her, and let us go, each one into his own country. For her judgment reaches to the heavens and is lifted up to the skies. 


One of the ideas behind being prepared is KNOWING WHEN TO LEAVE.

~Kendra


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## GrannyCarol (Mar 23, 2005)

Aintlifegrand said:


> Wells Fargo would be a good choice _for now_..just stay informed...and never have more on deposit than covered by FDIC...


I would SO not touch Wells Fargo - one of my friends was a mortgage broker for them up until a year or so ago, when they fired her for making too much money (so that she wouldn't be vested for retirement, dontcha know?). From what she said, they were already struggling THEN, so I can't imagine they are doing well NOW. Just a heads up.


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## GrannyCarol (Mar 23, 2005)

deuteronomy67 said:


> I didn't read ALL of the replies, so someone may have said this already. And quite honestly, some of this investment/stock market lingo is over my head.  ....But, has anyone else brought up, that as of Sept. 30th the US will be technically bankrupt?
> ....
> 
> One of the ideas behind being prepared is KNOWING WHEN TO LEAVE.
> ...


Where will we go? This whole world is bankrupt in the eyes of God. 

Truly though, I am interested in ideas of where to leave to.


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## FUNKY PIONEER (Sep 20, 2005)

I've heard South America is the place to be.


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## Clementine (Dec 21, 2006)

Hmmm. My 401k is through AIG. Aside from quitting my job, I can't access that money. Should I just go ahead and kiss it good-bye? Would you guys stop any further contributions?


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## Freeholder (Jun 19, 2004)

BlueJuniperFarm said:


> Yes, I think you are correct. It's going to be little bumps up and big bumps down from here on out, IMO.
> 
> Kathleen



Looks like today's 'little bump up' didn't last very long. 

Kathleen


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## seedspreader (Oct 18, 2004)

Clementine said:


> Hmmm. My 401k is through AIG. Aside from quitting my job, I can't access that money. Should I just go ahead and kiss it good-bye? Would you guys stop any further contributions?


Why can't you access it? You could at very least roll it over into an IRA couldn't you?


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## highplains (Oct 5, 2006)

Ok, first I think everyone needs to make sure they have about 2 weeks of cash on hand. My dad's bank - had some shenanigans going on and the FDIC swooped in - 2 weeks and it was 'opened' for business again. Until then everything was locked down tight - credit cards - everything.

That being said...
It appears the public failure rate is running about every 2 weeks so hopefully this weekend will be quiet - if it's not, I definitely think that Paulson & the gang are trying to catch a whale on fly fishing gear. For those who can't understand this analogy - OH -POOPIE is going to hit the fan in very short order.

One final note - since most of us are diligently trying to get out from under credit card debt - WATCH when those payments are due - banks are rolling due dates around very quickly now so they can catch you with late fees etc. 
I know some of you are lucky enough not to have the debts that way, but there are alot of us trying to catch up - this is an FYI for all of you.

Watch your ducks & chickens - or investments and debts - everyone is after Joe Taxpayer now to get them out of debt - and we haven't started seeing the unscrupulous side of lenders yet.


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## highplains (Oct 5, 2006)

If anyone out there happens to see something buried - not main headlines, that involves banks - please copy and paste the important parts of the article and give a link too.
I think there is going to be alot of info that is going to be a 'small blink on the radar' and then disappear, only to come out later when the Feds step in or headline announcements of bankruptcy.

Remember knowledge is power - lets help your fellow homesteaders out.
We're all in the same boat! We'll I think I might only have a kayak or innertube :goodjob:


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## pickapeppa (Jan 1, 2005)

highplains said:


> Ok, first I think everyone needs to make sure they have about 2 weeks of cash on hand. My dad's bank - had some shenanigans going on and the FDIC swooped in - 2 weeks and it was 'opened' for business again. Until then everything was locked down tight - credit cards - everything.
> 
> That being said...
> It appears the public failure rate is running about every 2 weeks so hopefully this weekend will be quiet - if it's not, I definitely think that Paulson & the gang are trying to catch a whale on fly fishing gear. For those who can't understand this analogy - OH -POOPIE is going to hit the fan in very short order.
> ...


So when do they start recruiting the con artists from the prison camps?


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## rickd203 (Sep 11, 2005)

GrannyCarol said:


> Where will we go? This whole world is bankrupt in the eyes of God.
> 
> Truly though, I am interested in ideas of where to leave to.


I have posting for a while now for anyone that wants to join up with a slightly overweight two-legged pit bull with an abundance of self-sufficiency skills to send me a PM. I have had a few PM's so I do have somewhere to go. I live in a very congested area so my best option is to bug out. I recently have been on a survivalist web site and have traded emails with about 10 other people in the same situation. If you have enough land and would want 10-12 people watching your back, let me know.


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## Freeholder (Jun 19, 2004)

It's more likely to be every weekend from here on out. If WaMu doesn't go down this week I'll be very surprised. Bank of Scotland has already gone down this week (yes, it does affect our markets), and both of Switzerland's big banks are in deep kimchee, as well, though they may survive a little longer. 

I've seen speculation that AT LEAST 1,500 banks could go down before this is over, and it could be a lot more than that because everything is so interconnected. FDIC is not going to survive all that, so don't count on getting your money returned in only two weeks if your bank goes under. Look for the soundest bank you can find -- there are lists that rate the banks -- and move your money there; be prepared to pull at least two months worth out if you can (I never have that much that I can spare from paying this month's bills, but maybe some people do). Get your debts paid off as soon as you can, no matter what you have to sacrifice to get there. Debtor's prisons are not impossible. Forced labor, as in China, is not impossible (especially considering that they are going to end up owning a good chunk of this country before it's all said and done). 

Kathleen


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## stanb999 (Jan 30, 2005)

highplains said:


> If anyone out there happens to see something buried - not main headlines, that involves banks - please copy and paste the important parts of the article and give a link too.
> I think there is going to be alot of info that is going to be a 'small blink on the radar' and then disappear, only to come out later when the Feds step in or headline announcements of bankruptcy.
> 
> Remember knowledge is power - lets help your fellow homesteaders out.
> We're all in the same boat! We'll I think I might only have a kayak or innertube :goodjob:


I will not say where or how I know.

But if you can read some code..... This is the word I have. I'm not telling anyone to act on this. So please don't. Use your Judgment. All bank deposits are insured by FDIC 100% to 100,000 dollars and 250,000 If it's and IRA....

IF your well is far, you should go and get your water closer....
If you Wana wait for the cow to MOO. You may not get fresh milk.


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## deuteronomy67 (Jul 3, 2008)

GrannyCarol said:


> Where will we go? This whole world is bankrupt in the eyes of God.
> 
> Truly though, I am interested in ideas of where to leave to.


You are right, the whole world is bankrupt in His eyes.

But leaving a location, because of what you see coming is much like evacuating before the hurricane hits - only not going back. I can see the storm coming - well actually it feels more like a freight train - so get out of the way - or off the tracks. 

Personally I don't think SA is a good place right now either. Have you followed the situations in Venezuela, Bolivia & Honduras? The US gov reaches far and wide. Remember Georgia?

No place on earth will be untouched by what's coming, BUT some places will fare better than others. I just don't think the US is going to land on the up side. Rather at the bottom of the barrel if you ask me. (Jer. 50 & 51)

~Kendra


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## Razorback21 (May 13, 2003)

_http://www.cnbc.com/id/26775616_
Why is hardly anyone talking about these Money Market funds "breaking the buck"? That is actual proof that runs have started on these Money Market accounts. Putnam went as far as to halt withdrawals just short of their break the buck mark. That worries me when you call to withdraw your money and they "no, you can't have it right now".


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## Razorback21 (May 13, 2003)

_http://www.foxbusiness.com/furl/sto...ance/bny-mellon-cash-fund-breaks-buck-report/_

Okay, I stand corrected...two different business websites are talking about two different money market funds breaking the buck. But still, Isn't this just a little alarming for the average guy on the street?


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## Scott in Florida Panhandl (May 10, 2002)

Scott in Florida Panhandl said:


> Rally tomorrow, sell off Friday,-500pts, another financial institution crash over the weekend.JMHO



Well, I got today right, +378, hope I'm wrong on the rest.


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## highplains (Oct 5, 2006)

Hi, I think if you made this call right, and tomorrows as well. We are kneedeep in the cesspool and it's filling fast.

We're all in this together - be good to your neighbors!





Scott in Florida Panhandl said:


> Well, I got today right, +378, hope I'm wrong on the rest.


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## uyk7 (Dec 1, 2002)

> I've heard South America is the place to be.


Put this to the tune of "Green Acres":

South America is the place for me
Jungle living is the life I need..

(can't really remember much else of the song so I'll let someone else pick it up from here.)



.


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## WolfWalksSoftly (Aug 13, 2004)

This whole deal about bail out's makes me MAD. These are the same people who a few years ago cried to get the Bankruptcy Laws changed so it would be harder for the common folk to get relief. Now THEY are the ones saying help help. These people were gambling with the markets, and being greedy. What a crock, and probably the worst part about this whole thing is it is NOT Constitutional. Republic forms of Government do not own corporations (Freddy and Fannie).


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## stanb999 (Jan 30, 2005)

WolfWalksSoftly said:


> This whole deal about bail out's makes me MAD. These are the same people who a few years ago cried to get the Bankruptcy Laws changed so it would be harder for the common folk to get relief. Now THEY are the ones saying help help. These people were gambling with the markets, and being greedy. What a crock, and probably the worst part about this whole thing is it is NOT Constitutional. Republic forms of Government do not own corporations (Freddy and Fannie).


It's come out tonight....

If the bank chooses to use this program (the way it is structured now). They will lose all investor stock value/company value. Like they did for AIG. The stock market wont like this. Expect the market to respond.


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## p1gg1e (Aug 20, 2008)

Anyone know the specifics of this new government entity to oversee debt?

Being a Libertarian the words new and government makes me even more freaked out


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## Guest (Sep 18, 2008)

In 1989, the Resolution Trust Corporation was set up by the government to resolve the failure of 747 banks with total assets of 394 billion. The total cost of the project was 88 billion dollars. Everybody thought it was the end of the world then too, now nobody even remembers it.


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## p1gg1e (Aug 20, 2008)

zong said:


> In 1989, the Resolution Trust Corporation was set up by the government to resolve the failure of 747 banks with total assets of 394 billion. The total cost of the project was 88 billion dollars. Everybody thought it was the end of the world then too, now nobody even remembers it.


LOL I was 8 so I wasn't watching the market then 

Hum...wonder what 88 billion + inflation would be now? I guess if the government is making a new faction and spending more money then that must mean its a good idea


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## highplains (Oct 5, 2006)

Yes I remember those. Just started to read the W Journal then.

The world will go on, might not be as nice as we like it, and certainly believe in keeping some investments close at hand as well. But usually things keep chugging along. There are too many of the big people that have vested interests in keeping us 'wage slaves' that if things really got bad, they'd lose their 'slaves'.

Keeping that in mind, I think we'll keep chugging along, not in a happy ever after sort of way, just grinding along.

Anyhow we'll see what tomorrow brings - I expect a rather good drop myself since I think the FED artificially raised stock prices today. What I am worried about is the announcement of:
(place a large bank or financial institution here) is being assisted by the government and being placed for sale.
If this keeps up, the government will definitely be assisting in loss of trust in the markets instead of them actually trying to bring trust back into the markets.

Time will tell, it's been an interesting story so far.






zong said:


> In 1989, the Resolution Trust Corporation was set up by the government to resolve the failure of 747 banks with total assets of 394 billion. The total cost of the project was 88 billion dollars. Everybody thought it was the end of the world then too, now nobody even remembers it.


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## stanb999 (Jan 30, 2005)

zong said:


> In 1989, the Resolution Trust Corporation was set up by the government to resolve the failure of 747 banks with total assets of 394 billion. The total cost of the project was 88 billion dollars. Everybody thought it was the end of the world then too, now nobody even remembers it.


The difference between today and the 80's is the collapse of the derivatives market. As they unwind it's estimated to be in excess of 400 trillion. This is 10 years of world GDP.

To put the bail out into a proper frame....

Picture p--sing up stream in the Mississippi river and claiming you are driving back the flow.

This is the extent of the damage done.


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## jasper (Aug 28, 2006)

i think the market is going to end the day on the downside tomorrow. it will be a good indication of how much faith people have in the market. i am thinking not too many people want a lot of exposure over the weekend, its just too long to hold their breath.

i try to have some faith that good heads will prevail but i am seriously disappointed with washington as a whole. there's a whole lot of finger pointing going on while the whole time they are scratching their butts away from the cameras and trying to figure out what the heck happened.

when they are saying someone is asleep at the wheel, quite frankly there's tons of blame to go around. and quite frankly if washington can keep us all angry and bickering with ourselves, they think we won't notice the mess they are making of things. its actually worked for a while but i sense things are truly gonna change. and if not now, most definitely in 4 years. 

as a population we are all gonna suffer while the fat cats walk away again.


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## Ohio Rusty (Jan 18, 2008)

All day, everyday they are living it up like a champagne and lobster banquet, and expecting the taxpayers now to foot the bill for their excesses .....

What I'm really surprised about is the foriegn markets like Europe and Asia haven't yet filed some sort of lawsuit against the U.S. Financials (Fed and Treasury) for all the damage and losses they have sustained because of the subprime lending and housing mess. It was our companies that sold them the bad debt knowing full well the implications of what was coming. I'm waiting to see what recourse they take against the United States. We haven't even fathomed yet what kind of mess that will drive this country into ..... 
Ohio Rusty ><>


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## stanb999 (Jan 30, 2005)

highplains said:


> If anyone out there happens to see something buried - not main headlines, that involves banks - please copy and paste the important parts of the article and give a link too.
> I think there is going to be alot of info that is going to be a 'small blink on the radar' and then disappear, only to come out later when the Feds step in or headline announcements of bankruptcy.
> 
> Remember knowledge is power - lets help your fellow homesteaders out.
> We're all in the same boat! We'll I think I might only have a kayak or innertube :goodjob:



http://www.ft.com/cms/s/0/c654fc2c-85e3-11dd-a1ac-0000779fd18c.html


WaMu waits for firm offer
By Saskia Scholtes, Julie MacIntosh and Henny Sender in,New York 

Published: September 19 2008 03:00 | Last updated: September 19 2008 03:00

Five banks have come forward to evaluate Washington Mutual's financial records as part of an auction process run by WaMu's adviser, people familiar with the matter said yesterday.

WaMu shares rose 14 per cent yesterday after news it had put itself up for sale. The five banks that have looked through the WaMu materials include JPMorgan Chase, Wells Fargo, Citigroup, HSBC and Banco Santander, the people familiar said. It was unclear whether any of them intended to make an offer for WaMu. Goldman Sachs is conducting the auction for Seattle-based WaMu - the sixth largest US bank - with $310bn in assets.

JPMorgan and Wells Fargo declined to comment. Citi, HSBC and Santander were not available for comment.


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## Razorback21 (May 13, 2003)

zong said:


> In 1989, the Resolution Trust Corporation was set up by the government to resolve the failure of 747 banks with total assets of 394 billion. The total cost of the project was 88 billion dollars. Everybody thought it was the end of the world then too, now nobody even remembers it.


The RTC actually made a profit by the time it was disbanded in 1996. However, we are comparing hard assets (real estate) of the S&L Crisis with monetary debt instruments (bundled sub-prime loan paper) of the 2008 crisis, that as I understand it, cannot be unbundled.

Most of us homesteading types would be all over buying real land for a discount. Heck, some of us would welcome it if we are in the market for real estate. But would you invest in a block of mortgages that pay a fixed amount, IF the borrowers don't default? That is kind of what we are looking at in simplisitic terms.


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## pickapeppa (Jan 1, 2005)

Razorback21 said:


> The RTC actually made a profit by the time it was disbanded in 1996. However, we are comparing hard assets (real estate) of the S&L Crisis with monetary debt instruments (bundled sub-prime loan paper) of the 2008 crisis, that as I understand it, cannot be unbundled.
> 
> Most of us homesteading types would be all over buying real land for a discount. Heck, some of us would welcome it if we are in the market for real estate. But would you invest in a block of mortgages that pay a fixed amount, IF the borrowers don't default? That is kind of what we are looking at in simplisitic terms.


Are the good mortgages not bundled with the bad? I was under the impression they were mixed and not all would default, but a smaller percentage.

Also, I wouldn't mind IF the terms of the bad loans were renegotiated to allow the sub-prime borrowers to make good on their mortgages. It's the only way it's going to work. We all know pay raises aren't on the table here. Just the opposite if anything.

Also, provide more tax relief for the people who are struggling to make their house payments, car payments, student loan payments, credit card payments, medical bills AND transportation costs to get to work.

It just makes sense.

There comes a time when capitalists have to wake up and realize people need real money to pay their debts. If that can't be made available, then neither should the credit.

I firmly believe that if the roadblocks to success are removed, ie. unrealistic costs/regulations blocking competition in the world of innovation and business start ups, a MAJORITY of people enjoy working toward success and taking pride in their accomplishments. 

This country has a lot of work to do in regard to enforcing laws designed to prevent the monopolization that's consumed the market place, put us all in harm's way, and lowered our standard of living.


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## Razorback21 (May 13, 2003)

_


pickapeppa said:



Are the good mortgages not bundled with the bad? I was under the impression they were mixed and not all would default, but a smaller percentage.

Click to expand...

_


pickapeppa said:


> > Not necessarily...some of these debt instruments are ALL sub-prime. You are correct in that some institutions mixed all classes of mortgages together.
> >
> > _Also, I wouldn't mind IF the terms of the bad loans were renegotiated to allow the sub-prime borrowers to make good on their mortgages. It's the only way it's going to work. We all know pay raises aren't on the table here. Just the opposite if anything._
> >
> > ...


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## Andy Nonymous (Aug 20, 2005)

stanb999 said:


> http://www.ft.com/cms/s/0/c654fc2c-85e3-11dd-a1ac-0000779fd18c.html
> ... Goldman Sachs is conducting the auction for Seattle-based WaMu - the sixth largest US bank - with $310bn in assets.


 ...or is that 310bn in liabilities, known as "fractional reserve banking loans subject to default as the R/E and consumer credit markets continue to devolve"? Yes, it makes a difference.

"...Which brings us to the urgent realization of how much there really is left to own." (Chairman of the Very Big Corporation, from Monty Python's Meaning of Life) The question remains: who is running the Crimson Permanent Assurance, and where are they when we need them most?


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## highplains (Oct 5, 2006)

Interesting day today, all the bail-out news, and the stock market is up.
Is EVERYONE really that narrowly focused that they only see short term and in reality this in the long term is going to suck rotten eggs because of all the debt?

Well folks lets stay tuned for the non-announcements that the govt is helping everyone else out.

:soap:


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## p1gg1e (Aug 20, 2008)

Well the rich and powerful need to suck every last drop of money out of the market , so when it really falls all the little people get screwed. Just buisness as normal :spam:


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## TexasArtist (May 4, 2003)

Does this help explain things?


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## Guest (Sep 19, 2008)

IF banks were allowed to fail in huge numbers, Like 1929 when people made runs on the banks to get their money out, thus collapsing the bank, THEN people that had some cash would be able to go to the auctions and pick up YOUR mortgage for pennies on the dollar. There would be so many failing at the same time, nobody would have to pay fair value for anything. SO, if the banks were allowed to fail, I could go to the auction and buy YOUR hundred thousand dollar mortgage for 4 or 5 thousand bucks. As the holder of your mortgage, I could raise your interest rates and send you packing. Anybody that thinks this is a gross exaggeration needs to check the history of the depression real close. 
Just look at how many people in this very forum a couple days ago were discussing going to the bank and taking all their money out, and multiply that by millions. We were in a position of a near panic which could have led to the worst case scenario. I know that some people are highly critical of the government's move, and claim that the government is bailing out big banks, etc. That just isn't true. What happened here is that the government protected you from me. Because, when they're selling mortgages for pennies on the dollar, I'm buying. and if I buy your mortgage, I'm looking for what's best for me. There are a whole lot of people that will be buying and a whole lot more that'll be living in a tent down by the creek. SO, if you have a better plan, you need to be in Washington tomorrow morning. If not, you need to be glad that the government saved you from people that have the wherewithal to buy everything. If you're going to cry Bush, Bush, you're so far out of contact with economics you shouldn't even be reading this. People that can only find fault and lay blame are of no real use in an emergency. When the house is on fire, you don't need some chucklehead in the way handing out pamphlets and wringing his hands. On the other hand, people that can formulate a plan like this are saving America.


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## FUNKY PIONEER (Sep 20, 2005)

Apparently you missed when they tried something similar in the beginning of the GREAT DEPRESSION. Not to mention just because you buy a mortgage DOSE not mean you can change the terms of the mortgage. You are absolutely delusional to think this will save America, it will only send us in to a spiraling pit of hell and hyper inflation. This dose not protect me at all. They are give these companies cart blanch, if you or I pulled this kind of thing we would be in JAIL for FRAUD.


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## p1gg1e (Aug 20, 2008)

zong said:


> IF banks were allowed to fail in huge numbers, Like 1929 when people made runs on the banks to get their money out, thus collapsing the bank, THEN people that had some cash would be able to go to the auctions and pick up YOUR mortgage for pennies on the dollar. There would be so many failing at the same time, nobody would have to pay fair value for anything. SO, if the banks were allowed to fail, I could go to the auction and buy YOUR hundred thousand dollar mortgage for 4 or 5 thousand bucks. As the holder of your mortgage, I could raise your interest rates and send you packing. Anybody that thinks this is a gross exaggeration needs to check the history of the depression real close.
> Just look at how many people in this very forum a couple days ago were discussing going to the bank and taking all their money out, and multiply that by millions. We were in a position of a near panic which could have led to the worst case scenario. I know that some people are highly critical of the government's move, and claim that the government is bailing out big banks, etc. That just isn't true. What happened here is that the government protected you from me. Because, when they're selling mortgages for pennies on the dollar, I'm buying. and if I buy your mortgage, I'm looking for what's best for me. There are a whole lot of people that will be buying and a whole lot more that'll be living in a tent down by the creek. SO, if you have a better plan, you need to be in Washington tomorrow morning. If not, you need to be glad that the government saved you from people that have the wherewithal to buy everything. If you're going to cry Bush, Bush, you're so far out of contact with economics you shouldn't even be reading this. People that can only find fault and lay blame are of no real use in an emergency. When the house is on fire, you don't need some chucklehead in the way handing out pamphlets and wringing his hands. On the other hand, people that can formulate a plan like this are saving America.


This comes back always to "feed a fish , catch a fish " 

Stuff happens , sometimes bad. MAYBE if we didn't have the government in the issue so much in the first place this issue wouldn't be so over inflated and at least our government wouldn't be broke and using OUR money ( those who didn't buy the $400,000 house only worth $100,000).

Saving America? Or saving the rich people STEALING tax payer money through approved money laundering?

Oh Thank you all mighty government for saving the rich bankers and investors!:bow:


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## Guest (Sep 19, 2008)

Wow, that's a couple of great plans there. Hope you guys make a good presentation in Washington. I mean a couple of really good plans.


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## FUNKY PIONEER (Sep 20, 2005)

Well I guess trying to give you an economics lesson is about as successful as fishing in a desert Zong.


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## Guest (Sep 20, 2008)

FUNKY PIONEER said:


> Well I guess trying to give you an economics lesson is about as successful as fishing in a desert Zong.


 Wow, that's an ever better plan. Lets see. Try the Paulson plan, or the fishing in a desert plan. Man, I don't know why YOU aren't the secretary of the treasury with a plan like that one. Or Federal reserve chairman. But, I'm forwarding both your plans to the white house right now, they're so much better.
It always amazes me when people think that our nations leaders are intentionally trying to destroy the country. And that everything they do is always the worst and stupidest thing possible. Yet nobody ever has a better idea. House painters, taxi drivers, bar tenders, they all can criticize. But they never have a better idea.


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## uyk7 (Dec 1, 2002)

> Yet nobody ever has a better idea.


Ron Paul has a better idea!




.


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## p1gg1e (Aug 20, 2008)

zong said:


> Wow, that's an ever better plan. Lets see. Try the Paulson plan, or the fishing in a desert plan. Man, I don't know why YOU aren't the secretary of the treasury with a plan like that one. Or Federal reserve chairman. But, I'm forwarding both your plans to the white house right now, they're so much better.
> It always amazes me when people think that our nations leaders are intentionally trying to destroy the country. And that everything they do is always the worst and stupidest thing possible. Yet nobody ever has a better idea. House painters, taxi drivers, bar tenders, they all can criticize. But they never have a better idea.


Sadly like the 2nd amendment its our job and right to complain and criticize 

The people at the top aren't trying to destroy our country only milk every dollar they can for them selves and their friends...its all buisness! If they REALLY cared they wouldn't have put any money into the system to begin with and devalued the dollar...

Cant wait till the universal heath care is rolled out because of the high unemployment rate..that's next :dance:

Sigh


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## Watcher48 (Aug 30, 2007)

As long as they got a hold on the short sellers all the numbers are bogus unless you trade inside the time line. Nobody knows whats gonna happen when they turn them lose again. And with elections coming up you can bet that the hold will last unitll after the elections.


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## Guest (Sep 20, 2008)

uyk7 said:


> Ron Paul has a better idea!
> 
> 
> 
> ...


I really liked Ron Paul and think he would have been good for America. I think that Ron Paul is the most decent person in the politics. I feel like the media didn't really give him the exposure they gave everybody else, but I probably think that because I couldn't understand why everybody else wasn't as impressed as I was. Some of his ideas, in particular the return to the gold standard would be nearly impossible to implement, but a good faith effort to rid the world of fiat currency would go a long way. I listened to speech after speech, and played them back for anybody that would listen. Every single person seemed to think that RP was saying what they were thinking.


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## FUNKY PIONEER (Sep 20, 2005)

Well Zong I think we have more in common than I though, Ron Paul is my Hero. Peace to you friend. ;0)


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## uyk7 (Dec 1, 2002)

> As long as they got a hold on the short sellers all the numbers are bogus unless you trade inside the time line.


The problem now is that there are other companies that want to be added to that list. Just wait until 90% of companies are on the list.




.


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## seedspreader (Oct 18, 2004)

I find it funny that they specifically let Lehman Brothers fail and THEN rescued EVERYONE else. funny that.


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## milkinpigs (Oct 4, 2005)

zong said:


> IF banks were allowed to fail in huge numbers, Like 1929 when people made runs on the banks to get their money out, thus collapsing the bank, THEN people that had some cash would be able to go to the auctions and pick up YOUR mortgage for pennies on the dollar. There would be so many failing at the same time, nobody would have to pay fair value for anything. SO, if the banks were allowed to fail, I could go to the auction and buy YOUR hundred thousand dollar mortgage for 4 or 5 thousand bucks. As the holder of your mortgage, I could raise your interest rates and send you packing. Anybody that thinks this is a gross exaggeration needs to check the history of the depression real close.
> Just look at how many people in this very forum a couple days ago were discussing going to the bank and taking all their money out, and multiply that by millions. We were in a position of a near panic which could have led to the worst case scenario. I know that some people are highly critical of the government's move, and claim that the government is bailing out big banks, etc. That just isn't true. What happened here is that the government protected you from me. Because, when they're selling mortgages for pennies on the dollar, I'm buying. and if I buy your mortgage, I'm looking for what's best for me. There are a whole lot of people that will be buying and a whole lot more that'll be living in a tent down by the creek. SO, if you have a better plan, you need to be in Washington tomorrow morning. If not, you need to be glad that the government saved you from people that have the wherewithal to buy everything. If you're going to cry Bush, Bush, you're so far out of contact with economics you shouldn't even be reading this. People that can only find fault and lay blame are of no real use in an emergency. When the house is on fire, you don't need some chucklehead in the way handing out pamphlets and wringing his hands. On the other hand, people that can formulate a plan like this are saving America.


Any chance you have a mortgage on your home?

Maybe you have money invested in the stockmarket/mutual funds?


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## Guest (Sep 20, 2008)

seedspreader said:


> I find it funny that they specifically let Lehman Brothers fail and THEN rescued EVERYONE else. funny that.


 Yea, no kidding. Just like a few months ago when Bear Stearns was basically fed to the lions. I remember one commentator pointing out that Bear Stearns was the only big Wall Street firm that didn't come to the rescue of Long Term Capital Management in 1998, and that the original $2 dollar buyout was a slap of retribution. I also heard that Bear Stearns was being punished for its role in the creation and propogation of some of the more bizarrely leveraged mortgage derivitives. After the $2 was accepted, then the later raise to $10 seemed like a gift and was virtually unopposed. Kinda like we are worth 2 bucks, these nuts are giving us 10 bucks, lets take it and run before they change their minds. But, if you watch CNBC all day, you'll see and hear hundreds of conflicting opinions. Interestingly the Long Term Capital failure was viewed as a potential catastrophe too. 
From Wikipedia on Long Term Capital Management: Between 1994 and 1998 the fund showed a return on investment of more than 40% per annum. However, its enormously leveraged gamble with various forms of arbitrage involving more than $1 trillion dollars went bad, and in one month, LTCM lost $1.9 billion. On the precipice of not only an American financial disaster, the fund's imminent collapse had significant international monetary implications, jeopardizing the financial system itself. Prompted by deep concerns about LTCM's thousands of derivative contracts, in order to avoid a panic by banks and investors worldwide, the Federal Reserve Bank of New York stepped in to organize a bailout with the various major banks at risk.


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## Guest (Sep 20, 2008)

milkinpigs said:


> Any chance you have a mortgage on your home?
> 
> Maybe you have money invested in the stockmarket/mutual funds?


 Because I have never bought anything without paying for it cash, or the "loan assumption" that used to be commonplace, When I bought this house, I had to get a "subprime" loan. At that time, it meant that you didn't have the proper credit so basically I got a loan paying twice the interest rate a regular loan would have carried. The whole concept of subprime changed greatly since then. My brother in law got a good mortgage at 7%. I got a mortgage at 14%. I poured every extra cent into paying it off, and paid it in short order.
I had money "invested" in the tech bubble of 1998-2000. I started out with a thousand shares of a 10 dollar stock, I bought it on margin, so a 5 thousand dollar investment. It went up and up and up, then started down. In one day I lost more than my original investment and realized that I had lost contact with reality on that. So I exited. Shortly thereafter, the entire market started diving and I was extremely fortunate to have gotten out near the top. I began dabbling again after the beginning of the Iraqi war, knowing that, historically, war makes the market rise, BUT, with the knowledge that if you get out when things turn against you, you'll survive to do it again. In August of last year, when the "subprime crisis" began to be widely discussed, I went net short the market, in other words, I thought that the market would begin to dive down, so I sold then to buy back cheaper later. I don't have the money to push the market down, I'm just a rider on the train, not the driver. I normally trade in options, which limit my exposure, but in the event that things go my way, i have unlimited potential gain. After Monday's 500 point drop in the dow, and then a small bounce Tuesday, another big drop Wednesday, I was looking real good. Even better on Thursday, then about 3:00 or so, there was some talk about a bailout of some description, When the market began to rise(against the direction of my trade) I determined how this could eventually play out, and took my exit. There were 2 possibilities: 1: taking my profit and closing my trade, it might go my way and I'd lose a potential gain BUT, I'd keep the gain I already had. or 2: it would go against me and wipe me out. Although I'm not a daytrader, I'm fully aware that if I take my marbles and go home, I'll be back to play another day.
ETA:
To Clarify, realizing that this will be unclear to anyone not familiar with the terminology, As far as stock market goes, starting in august of last year, my belief was that the stock market was headed down, and placed my "bets" accordingly. Right now, I'm unsure of the end result of this, but I'm leaning toward some more selling down after this "irrational exuberance" is over. For the time being I took my winnings and am out of the market, and sitting on the porch til it's settled. There's always next month's contracts.


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## Narshalla (Sep 11, 2008)

seedspreader said:


> Ok, my question is different. I have a credit debt (thank you self-employment) with WaMu... what happens if they go under? Someone buys the debt and then I start the merry go round of people buying it and selling it and me trying to figure out who to pay???


No, actually, as long as you are current, they will try to keep your account because it is "good" debt -- _for them_ --it is producing income for them, so they will keep it as long as possible. If you are behind, they will probably sell for significantly less than you owe, just so they will have the ready cash.


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## pickapeppa (Jan 1, 2005)

Seedspreader, interestingly enough, my student loans and our mortgage have been sold multiple times over the last six or so years. Our accounts have always stayed the same. Once or twice we had to update the billing address info, but other than that all the transactions went smoothly and on the regular schedule as before. It's all pretty seamless these days. Good luck!


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## Kmac15 (May 19, 2007)

Narshalla said:


> No, actually, as long as you are current, they will try to keep your account because it is "good" debt -- _for them_ --it is producing income for them, so they will keep it as long as possible. If you are behind, they will probably sell for significantly less than you owe, just so they will have the ready cash.




Not always, we had a mortgage that we joked was sold every 6 months and we were NEVER late.

we were starting to get a complex, wondered if they didn't like our toothpaste or something.


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## smurfhuts (Sep 5, 2008)

> Pickapeppa: $1,000 trillion? I haven't heard it that high, but maybe 4 to 9 trillionish.



According to some learned minds .... world wide derivitives are in the neighborhood of 1.2 quadrillion dollars now (how many high school seniors graduated last year that can't tell you what that number means). In my mind ..... there has been so much devaluation of assets that that number has to be too high.



> Pickapeppa: Are the good mortgages not bundled with the bad? I was under the impression they were mixed and not all would default, but a smaller percentage.


The critical problem here is LEVERAGE. Fannie and Freddy together are leveraged at around 60 to 1. So a 2% loss in all of those mortgages means they are way beyond bankrupt. Think all those mortgages are holding up that well? The bulk of all derivitives are leveraged in the 20 to 1 to 30 to 1 range. It's a horrible mess that needs more bandaids than "we the people" can possibly afford.


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## pickapeppa (Jan 1, 2005)

I always wonder why they sell ours too. We have a lower debt to income ratio than most people and haven't missed any payments, good credit, etc. This year ours was sold from ABN-AMRO to CitiMortgage. It made me wonder if ABN thought we were a risk or something and wanted to unload us onto another bank.

It does give you a complex. Lol.

On second thought, maybe they noticed we'd been paying off debt like it's been going out of style (and it is, is it not?), and decided we probably would start hammering down the mortgage next. This wouldn't bode as well for their profits over the long run.


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## uyk7 (Dec 1, 2002)

> According to some learned minds .... world wide derivitives are in the neighborhood of 1.2 quadrillion dollars now


The figure I have found while researching was in the neighborhood of $500 trillion. But at that amount, what's a few thousand more trillions?


.


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## stanb999 (Jan 30, 2005)

pickapeppa said:


> I always wonder why they sell ours too. We have a lower debt to income ratio than most people and haven't missed any payments, good credit, etc. This year ours was sold from ABN-AMRO to CitiMortgage. It made me wonder if ABN thought we were a risk or something and wanted to unload us onto another bank.
> 
> It does give you a complex. Lol.
> 
> On second thought, maybe they noticed we'd been paying off debt like it's been going out of style (and it is, is it not?), and decided we probably would start hammering down the mortgage next. This wouldn't bode as well for their profits over the long run.



When they sell a set of mortgages it's always good to through in a good one I suspect.


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## stanb999 (Jan 30, 2005)

zong said:


> IF banks were allowed to fail in huge numbers, Like 1929 when people made runs on the banks to get their money out, thus collapsing the bank, THEN people that had some cash would be able to go to the auctions and pick up YOUR mortgage for pennies on the dollar. There would be so many failing at the same time, nobody would have to pay fair value for anything. SO, if the banks were allowed to fail, I could go to the auction and buy YOUR hundred thousand dollar mortgage for 4 or 5 thousand bucks. As the holder of your mortgage, I could raise your interest rates and send you packing. Anybody that thinks this is a gross exaggeration needs to check the history of the depression real close.
> Just look at how many people in this very forum a couple days ago were discussing going to the bank and taking all their money out, and multiply that by millions. We were in a position of a near panic which could have led to the worst case scenario. I know that some people are highly critical of the government's move, and claim that the government is bailing out big banks, etc. That just isn't true. What happened here is that the government protected you from me. Because, when they're selling mortgages for pennies on the dollar, I'm buying. and if I buy your mortgage, I'm looking for what's best for me. There are a whole lot of people that will be buying and a whole lot more that'll be living in a tent down by the creek. SO, if you have a better plan, you need to be in Washington tomorrow morning. If not, you need to be glad that the government saved you from people that have the wherewithal to buy everything. If you're going to cry Bush, Bush, you're so far out of contact with economics you shouldn't even be reading this. People that can only find fault and lay blame are of no real use in an emergency. When the house is on fire, you don't need some chucklehead in the way handing out pamphlets and wringing his hands. On the other hand, people that can formulate a plan like this are saving America.


Zong, They outlawed the practice that you are talking about in the 1930's....

Get Current.


One other reason the banks and holders of the mortgages want them bought at face value is the "Fair Debt collections Act." This will be the real death nail to the banking system...... Why you ask?


Well if a mortgage or debt is "marked down". the true value of the debt is changed. To make it simple....

If your mortgage as written was worth 100,000 then the bank says to the IRS that the paper is only worth 40,000. They write the "loss" off profits. It's illegal for them to pursue you for more than the 40,000 They said it was worth. 

This is why the Banks are begging to be saved from themselves and YOU.


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## pickapeppa (Jan 1, 2005)

stanb999 said:


> Zong, They outlawed the practice that you are talking about in the 1930's....
> 
> Get Current.
> 
> ...


Um, say wha? Are they then putting the written down portion into the government kitty and essentially handing us a bill for it? What happens to the $40,000 - are they keeping that part, or is it going into the kitty with the loss?


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## stanb999 (Jan 30, 2005)

pickapeppa said:


> Um, say wha? Are they then putting the written down portion into the government kitty and essentially handing us a bill for it? What happens to the $40,000 - are they keeping that part, or is it going into the kitty with the loss?


Well, not exactly.... What they are gonna do is tell the .gov that they have a mortgage worth 100,000. The Government then say great sell me that an I'll give you 100,000.

The above post by me is if they didn't do the bail out. This bail out only serves the banks no one else. If they don't get it done it will mean a collapse of the Federal Reserve and the Dollar. I knew this had to happen once the Fed took as collateral this carp. Now the Fed is insolvent. So the Treasury is to rescue them. This is what this is about.....

Not saving Main street or Wall Street.


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## stanb999 (Jan 30, 2005)

The other "magic" they hoped to create was the elimination of the Shorts in the market.... But a market with out shorts is just like you with out them.

NAKED.....

Shorts do hope the market goes "down". But that hope is tempered with the fact that they make money on a sale. So as the market falls they come in and buy to settle the contract. Thus putting a floor to all stocks. Now with out short selling there is no floor. So if a buyer doesn't present them self the stock will fall to when one does as opposed to the 1-3 % declines we have seen it could be 20-30%. Who want to buy then? There is no money in it. So this stabilization effort may be undermined. We will see???


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## highplains (Oct 5, 2006)

DOn't know if you all caught this but Ben slipped up on talking about debts, and let the credit card debt slip out too.

I know my wife and I are seriously reevaluating how quickly we are going to get debts paid off. We are lucky that our total debts are less than the price of one of the Mc Mansion homes, so we are lucky that way. We are dumping money in on everything now, get it paid off and get the credit card lice off our nest egg.

I think some bad things are coming down the pike, and unfortunately if we don't just buck up and resolve the real issues, we are all in for a lot of pain coming up.


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