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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (149438)	9/23/2008 3:14:29 PM
From: GraceZ	Read Replies (2) \| Respond to of 306849

yeah, you're agreeing with paulson that we're at financial defcon1 and if the mother of all bazookas isn't fired we're all dead.... The cascading failures are well in place and while the anarchist in me is somewhat fascinated by the possibility of watching the carnage up close and personal, the civilized person in me really doesn't want to see the results of a full scale financial meltdown even though I feel pretty good about my own personal situation. I don't think anyone can be certain of what will happen if nothing is done or how much it will cost. And, you are correct, his plan may not work. I don't think anyone truly knows what will work at this point. Maybe doing nothing works. Certainly we were headed here back in September 2001 when the terrorist attacks occurred. Oddly enough, the attacks had the effect of putting things off the track of straight down to Hell. Post attack, the market accomplished in ten days what WS talking heads had tried to accomplish over a year and a half of painful market declines. It allowed the market to find a floor and put people back on the buy side. In a widespread crisis of confidence almost nothing works except time, time to sort out what things are worth and letting cooler heads prevail. What is insidious about this particular failure is the way in which declining values have created a vicious cycle of further write downs and failures. In this case, I think authority has to step in because the cycle as such will in fact spiral down close enough to zero to effect just about everyone negatively regardless of their complicity in the root cause. Do I like the government having widespread authority over the economy? No, but this occurred long before I was born, during the Depression and during WWII when we basically instituted a command control economy. At the time, the S&L crisis and resulting RTC was suppose to sink us and end the world as we know it. Few people even remember those days or the crisis that precipitated it at all unless they were involved in it directly. It turned out to be a blip on the charts and yet there was the same level of political rancor surrounding the bailout, same claims about bailing out fat cats. I for one recall the lines around the block at a local S&L with people attempting to get at least some of their life savings out of a failing bank. I also remember a very good, financially sound client of mine getting their line of credit called in and the havoc that reeked on their cash situation. So much so that several friends of mine lost their jobs at the company in wide spread layoffs. I've lived through the financial shocks leading up to the NYC BK, Mexican debt default and Peso devaluation, the Asian currency contagion, S&L crisis, 1987 market crash, Russian Debt default, Y2K non event, 2000 tech bubble burst, emerging market debt defaults, LTCM fiasco as well as 9/11 with little or no serious consequence to my day to day life. Most of these events involved huge amounts of public money to avert disaster and Congressional hearings to assign blame. For the most part, ordinary people in the US don't even remember the particulars now because they didn't end up on a soup line like my parents and grandparents did in the Depression. Maybe if the authorities had allowed that outcome in those situations we wouldn't be here today because people and companies would have been forced to live more fiscally responsibly. OTOH maybe we'd have an economy more like that of Russia which was allowed to fail, with large sectors controlled by the black market and underworld mobs. I predict that in ten years few in the US will be able to recall the events leading up to this event.