As many of you have probably heard, the American economy is going a bit haywire. What are your thoughts on the current situation on Wall Street and elsewhere in the banking world? Should the U.S. approve the proposed $700 Billion bail-out, in an attempt to save the country from another depression, or is it stupid to ship so much money straight back to the people that got us into this whole mess?

If you haven't heard, a quick summary:

In what has been called the worst financial crisis in America since the 20's, we have found ourselves in a position where the 5 main investment banks have all either gone under, or switched to become bank holding companies. The stock market has seen falls greater than ever before in many cases. Why did this happen? Well, our banking system after the Great Depression was reformed, and (this is as I understand it, correct me if I'm incorrect) the new system in a classic American manner, put the power of the economy back in the hands of the people, and more specifically, the banks. For example, recently, if you wanted to buy a house, you would talk to a bank and they would look at your credit (do you have a good consistent income, do you spend a lot of money, do you have money right now, etc...) and then decide whether to give you a mortgage. In almost all cases, they would. If, however, you had a lower income, or were not smart with your money, they would treat you as a more risky venture, thus giving you a mortgage with a higher interest rate. The flaw with this is that the person was a more risky 'customer' they would have a less likely chance of paying off a mortgage in the first place, especially one with a high interest rate. The process spirals out of control as they person's mortgage is renegotiated to have a higher and higher interest. Eventually, they are facing foreclosure and the bank now owns your house. Everyone is a loser in that scenario... the house is virtually worthless to the bank, and they fall deeper into debt. Last weekend, the debt caught up with the banks, and they started going under. In response, the government is considering a $700 Billion bail-out... basically dishing over said amount of money to Wall Street and hoping they will be able to fix their debts, and be smarter the second time around.

I strongly suggest you read up on the issue, and try to switch into an economics class at school, because the next few weeks could see the end of the western world's banking system (Scary, eh ).

So... what do you guys think?

By the way, any comments along the lines of "Well that's why I don't live in stupid America" or "Guess it's time to move to Australia" or anything that doesn't actively and actually add something to the conversation will be deleted

Guess its time to move to....great britain.


I think the u.s. is heading for another depression, it probably won't survive it. We have too many enemies right now, due to the last couple of years, bush has been declaring everything "unamerican" as terrorist...

It's really quite scary tbh.

I don't have much of a comment other than I hope it gets better and we avoid a serious depression. If we do go into a depression my life will be hurt immensely because my family (that I live with) isn't exactly rich and we can't afford to be in one.

I'm all for the US bailing out the banks, as long as they force them to change their policies.
If the US goes down, everyone goes down, In a time where doomsday situations are flying around for everyone, one more thing to worry about just wont help anyone.
I'm all for brushing it under the carpet and moving on.

PS: Stay out of Australia.

I dunno if I'd go that extreme, but it was interesting to see that China and Korea (who own almost all of our debt) didn't do anything last weekend. If they had wanted to, they might have sold all their U.S. money while it was still worth anything at all, and that would have really screwed us over.

Im slightely lolling over this
But I also realise it won't be any good for the rest of the world... Im not sure what they could do about this, they shouldn't have let it come this far in the first place

Allthough percentage wise America only has like 50% more for each person to pay up to fix compared to the Netherlands, so we basicly suck too

American Banking; also known as running in, destroying as much as possible and then escaping with a fortune.

Hey Tyranno, why don't you stop being a stereotypical, stereotyping -----. Not everybody appreciates it and 99% of the people in the U.S. go against your stereotypes. So you can FoxgloveOFF if you're just going to attempt to diss the U.S.


EDIT: Do NOT flame each other. If you guys cannot debate civilly, I will warn you. -Zhou

haha too easy

Trolled .

Anyways, I'm not really into the economy, but from what I heard, the economy is in a crap state right now. I'm not sure if another depression will happen however.

Tyranno, I don't know where you got the idea that the bank owners are thinking "Hmm... this will make us a fortune if our bank goes under, so lets f*ck it all up!" -- it wasn't in anyone's best interests for this whole situation to come about.

Bailing out AIG was supposed to help them, but I heard from my father that it didn't help them much. SO yea, lets give another $700B that we could use to pave the road infront of my house or to add another entrance to my school since it takes 30 minutes to drive 3 miles to school for me. YES, lets do it.


Im sitting next to IAMAOM on the plane to GB.

I call window seat.

$700B is an appauling amount of money, but not in a good way.
With inflation how it is, let's just hand out $700 billion hoping it does something good.

I think it's all down to people living beyond their needs and banks/credit card companies feeding that need. Around 10 years ago I couldn't get a mortgage or credit card because I didn't earn enough but now you can buy a house and get $10,000 on a credit card without any income.

They don't care how much you lend because they are killing you with interest, that's where they make their profit!

This isn't just a problem for the US it's a problem throughout western society.

Well I think that's exactly it. Most markets aren't as big as the American one, but the same issue will arise if other countries don't change their banking policies. Some of the major banks that went under were international banks as well, and don't think that the European parts of those banks won't be affected... Morgan Stanley just moved 100s of millions of dollars from their international sectors to help their failing in America.

Well, i'm not good about economy, but 700 billion dollars is a nice amount of money, , maybe this shows how desperate the us government is.
If they don't do nothing maybe they might lose more money than that, so maybe it's a wise decision.

The real question is, where did this sudden $700 billion come from?

Taxmoney. We will have to find a way to pay it back though... our national debt isn't exactly tiny.

If we WERE to do this bail-out, the best way to do it would to be in "chunks". Many people would still have a rough time, but I believe that it wouldn't send us into a depression that we remember in the 1920's.

+1

Update: The bail out proposal was voted down today... maybe sometime next week...

I think that the American Government (which is really behind everything) is horrible...They dug their own hole,

my opinion right now is for them to do whatever they can to get back up on their own two feet.

Got denied from what I heard...

Big problems ahead I suppose

Flawed.

Now let's not turn this into a 'America vs Rest of the world' topic.


Well, they decided not to go with the 700 billion rescue plan. I am really wondering how this will turn out in the end.

From what I've heard, they wanted the 700 billion in full, with full control over it. In other words, they could have pocketed the money and it would have been in terms with the agreement. That's why congress gave 'em a big fat No.

To be honest, I have no idea what's going on with the economy. I have no idea how we got into this mess in the first place, I have no idea what the bailout is, and I have no idea how we will get out.

I do know that people DO benefit from companies crashing after they've made money. Fannie Mae and Freddie Mac are now under federal investigation for fraud.

I've done a little more research on it, and I don't think it's as huge as people say it is. I honestly don't think we'll go into a depression. There was a stock market crash in 1986, and honestly, nothing truly memorable happened. The stock market foxglovin' crashed and people don't pay much heed to it at all, but people do pay heed to the huge catastrophe of 1929. There is honestly a chance that this might somewhat blow over rather than sending the US into another depression.

Britain is already in a Depression I think (or near one) so I think the root of the problem isn't exactly going to get let off lightly. A Depression is probably unavoidable, but the scale of it can be low.

Then again, every day we are setting records for the biggest failings in Wall Street history... a couple days ago the Dow dropped 777 points. The problem with a free market is that it can't just "blow over" ... people are greedy and unless you are counting on the entire populous of stock brokers to let other people get to the bank first, we are in for trouble (although the FDIC should be able to insure everyone and take the pressure off the banks... if the FDIC can't pay up though, then we truly are screwed).

Anyways, that's all hypothetical. If the House starts giving up their "honorable belief in the free market" and their confidence that it will sort itself out, and if they all stop rejecting bills because it'll look good on their campaign platforms, we might be in luck.

Ok these are just my opinions.



One of the main reasons why we got into this mess is because people were getting qualified for loans that they couldn't pay. A LOT of people couldn't pay, and when they can't pay, companies lose a lot of money. When companies lose money, stock prices fall, and people panic. It snowballs.



I'm not saying that the DOW falling 777 points isn't bad, but percentage wise it's #17. A far cry from #1.

As far as the U.S. not being able to recover, of course it will recover. It just takes time.

Even though the DJIA is at its lowest in a while, it's because of fear and lack of confidence. I am betting myself that it's gonna go way up on monday.

Edit: Yeahh...I owe myself a lot of money.

Well, there is a good thing about this, since gas prices went down .