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 Posted - 10/01/2008 : 10:06:17
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How Big Is This $850,000,000,000 Bail-Out?
As this graph shows, the $850,000,000,000 bail-out is 34% the size of the entire Gross Domestic Product (GDP) of the United Kingdom.
Worse still, it doesn't include any new regulations to prevent the corrupt banking practices that brought about this financial crisis.
Thus many argue that this bail-out won't prevent this spreading financial crisis.
In psychiatry, this bail-out is like a parent paying off the drug debts incurred by an addicted son. It briefly postpones the son's "day of financial reckoning" but does nothing to correct the son's addiction which caused his financial problem in the first place.
Phil Long M.D.
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| e-pea
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Posted - 10/04/2008 : 07:34:43
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this guy i know says he's moving to austria after graduation. He thinks the european union is the leader of the future and thinks his chances are better there. i don't know if that's necessary.. I want to return to europe to live someday. i'd choose prague... i don't know. I don't want to flee my country just because the economy is tanking. I love canada...
Won't canada just find another trading partner if the USA can't afford to trade with us? canada has wealth that stays, not as much money but diamonds, oil, forest.. if the usa won't trade with us, someone will..
Is it also possible that the economy will remain stable because there are enough specialized workers to generate more wealth by outsourcing themselves? India has seen some success doing this, haven't they?
"He who would distinguish the true from the false must have an adequate idea of what is true and false." - BENEDICT SPINOZA |
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Posted - 10/04/2008 : 16:41:45
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Well, Congress passed a bailout bill. It's some 350-400pg bill, so I haven't learned all the details yet.
But in the Chicago Tribune, they said: "It authorizes the Treasury to start buying as much as $700 billion in bad mortgage-related debts from banks and other financial institutions."
And:
"It also offers taxpayers more than $100 billion in relief, exempting millions from the reach of the Alternative Minimum Tax and offering tax breaks for specific businesses as well. In addition, it raises the limit on federal insurance for depositors in banks and credit unions from $100,000 to $250,000."
My husband has a mutual fund which his work automatically donates to, and he can't cash it out until he retires or quits. We also have an Ameritrade Stock Account, but that money is sitting in cash, getting a little bit of interest. We have been very conservative and not invested in anything, especially when I was going to a talk therapist who wasn't taking our insurance.
Now things are better for us in that I have a job and my doctor bills are covered by our insurance.
EA Age: 32
Sex: female
working part-time, married
Diagnosed 1993, Bipolar I   |
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| EmergingArtist
Incredible Member (2000+ posts)
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| e-pea
Incredible Member (2000+ posts)
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Posted - 10/05/2008 : 17:35:22
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Take A Look At The Salaries Of These CEOs:
While they were running their companies into bankrupcy, these Wall Street CEOs were being paid obscene salaries:
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20081003/forbes_titans_081003/20081005?hub=TopStories
The financial markets represent only 5% of the US economy, but they are getting literally all of the government's bailout. Since the US government now has spent well over $1 trillion to bailout the tiny financial market; there will be little money left to bailout the remaining 95% of the economy.
What Can We Learn From All This?
Arrogance and selfishness are defining characteristics of Narcissistic Personality Disorder.
Severe Narcissistic Personality Disorder in leaders eventually destroys their followers.
Phil Long M.D.
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| e-pea
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Posted - 10/05/2008 : 18:39:32
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ok.. so i'm pissed off. What do we do about it?
How do we cope with this recession? what else can we do?
"He who would distinguish the true from the false must have an adequate idea of what is true and false." - BENEDICT SPINOZA |
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Posted - 10/05/2008 : 23:27:21
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Hi E-Pea,
Now that the recession has started, I suggested the following to my son and daughter:
- Quickly get out of debt.
Eventually recessions trigger inflation. In the recession of 1981 interest rates went to 23%. Thus it is essential to get out of debt before these high interest rates hit.
- Get out of the stock market.
I told my son and daughter to wait for the next market rebound, then get out of the stock market. Once the stock market crashes (and it could go down 50%), it will take many years before it regains its loses. After the stock market crash in 1929, it wasn't until 1954 that the DOW returned to its pre-crash level.
- Get into cash and don't buy anything.
I told my son and daughter to postpone making any major purchase until we see how bad this recession is going to be. Thus my son has postponed buying a condo. My wife and I have cancelled our Christmas vacation, and we have severely curtailed our spending.
- Don't buy gold or silver.
The gold and silver markets, like the rest of the commodity markets, are now extremely volatile and unpredictable. Precious metals are relatively small markets that can be easily manipulated by a few "big players".
- Vote for more regulation of financial markets.
National elections are coming up in both Canada and the USA. It is essential to vote for a political party that can rein in the corrupt financial practices that caused this economic meltdown.
- Hope that the sociopaths that caused this meltdown go broke.
The stupid and greedy financial leaders that got us into this economic meltdown have destroyed the financial security of millions of innocent people. I just hope that these sociopathic financial leaders also have their financial security destroyed. It would be extremely unjust to see these leaders just walk away unscathed with a generous government bail-out.
I am a psychiatrist, and not a financial advisor, so I can't advise anyone regarding their finances. However, I have told my family that I predict a major recession, and we should all be grateful that we have our health and our jobs. We've made it through previous recessions (and my parents lived through the Depression); so I know the key to coping with a recession is to spend less, work more, and to help those in need.
Phil Long M.D.
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Posted - 10/06/2008 : 11:45:48
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This is a good list i think..
- Quickly get out of debt.
yeah... this is frightening me. I have debt. Not as much as most people my age but I do have debt nonetheless.
- Get out of the stock market.
yup. I'm not in the stock market myself but my fiance's place of work, in lieu of old age pension, gives everyone stock. What does this mean for our old age if the stock is worth nothing?
- Get into cash and don't buy anything.
also really good advice.
- Don't buy gold or silver.
See, I actually thought gold and silver were the way to go in a time like this but i've been hearing this more and more.
- Vote for more regulation of financial markets.
Yeah. This is a tough time, we need to be able to take a no-nonsense and honest look at our finances without slipping into communism (nothing against communism but it sure wouldn't work in north america)
I'm not sure who gets my vote this time. They all seem like such tools. They always do though.
- Hope that the sociopaths that caused this meltdown go broke.[/*]
The stupid and greedy financial leaders that got us into this economic meltdown have destroyed the financial security of millions of innocent people. I just hope that these sociopathic financial leaders also have their financial security destroyed. It would be extremely unjust to see these leaders just walk away unscathed with a generous government bail-out.[/*]
Yeah... I agree with most of that.. frankly, I just want to see the mess cleaned up. Life is rarely fair. I'd rather see a few crooks get bailed out than see a few crooks take us all to hell with them.
The sad thing is, whether there is a bailout or not, they'll never go broke, not those guys... They are good at manipulating money and people probably. And they know people. all the right people to ask for favours. No matter what happens, they'll be fine.
quote:
I know the key to coping with a recession is to spend less, work more, and to help those in need.
Yes. Absolutely. this is a time of personal responsibility. Hm... That's a good reminder.
"He who would distinguish the true from the false must have an adequate idea of what is true and false." - BENEDICT SPINOZA |
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Posted - 10/07/2008 : 09:07:42
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No Bail-out For The 21% Of The World That Is Starving
Wrong Priorities
It took less than one week for the US government to pass a $850 billion bail-out package for Wall Street.
This same amount of money could have ended world hunger. However, saving speculators on Wall Street is more important to the US government than saving starving children.
The United Nations estimated that, in 2005, 1.4 billion people were living in extreme poverty (i.e., starving).
http://millenniumindicators.un.org/unsd/mdg/Resources/Static/Products/Progress2008/MDG_Report_2008_Addendum_En.pdf
This Economic Meltdown Was Avoidable
I live in Canada where the financial system is much more regulated than in the USA. Canada didn't allow the predatory mortgage lending practices that eventually destroyed the US housing market.
As a direct result of Canada's tighter regulation of its financial sector, not one Canadian bank has failed and Canada hasn't experienced the housing price meltdown that America has.
In contrast, the US Congress decided to deregulate the US financial sector in 2000; and that, I believe, directly caused this economic meltdown.
Had the US financial sector not been deregulated; today, instead of bailing out the speculators on Wall Street, America could have been ending world hunger.
Phil Long M.D.
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Posted - 10/10/2008 : 00:41:31
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We Are About To Have A Stock Market Crash
- Japan and Russia have already had a stock market crash; since July they have lost more than 50% of value of their stock markets. Japan is the world's second largest economy.
- The nation of Iceland is now bankrupt.
- USA and Canada, since July, have lost nearly 40% of the value of their stock markets.
- Tragically, next week is predicted to be worse than this week on the global stock markets.
Phil Long M.D.
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Posted - 10/10/2008 : 21:41:23
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Top Republican Congressman Warns That USA Is Heading For Bankrupcy
Although the U.S. National Debt is $10.3 trillion, this amount doesn't include all that the US government actually owes. The US government refuses to follow proper accounting procedures; hence doesn't include the cost of entitlements (like Medicare, Medicaid and Social Security) in calculating its National Debt.
When these entitlements are included, the US "National Debt" is actually $53 trillion.
The ranking Republican on the US House Budget Committee said the US government is headed toward bankruptcy if it stays on its current fiscal course.
Today, the entire nation of Iceland just went bankrupt. Thus this bankruptcy warning is extremely relevant.
Please watch this video interview with this Republican Congressman.
Phil Long M.D.
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Posted - 10/10/2008 : 22:02:35
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epic fail.
I can't stop thinking about this. There has to be a solution.. There has to be. Everything has a solution.
What does this mean for people like me in debt and presently unable to pay it back? i have just enough as it is.
i've had trouble with current events lately. They're overwhelming my thought process. this topic is slippery. I am very concerned about humanity's immediate future. Our memes are turning on us. everything feels like it's coming to an end.
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Posted - 10/10/2008 : 22:22:36
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Why Is A Psychiatrist Writing About The Economy?
In medicine, physicians have a legal obligation to warn their patients about imminent danger.
So, if a physician knows that person is about to injure someone, the physician has a legal responsibility to notify the intended victim that they are about to be injured.
In psychiatry, I believe that psychiatrists have a moral responsibility to warn their community of imminent danger.
Thus I am posting these warnings about the consequences of the current economic meltdown. If you read my past posts; you will see that my predictions (unfortunately) were very accurate.
I am not indulging in fear-mongering (you can watch President Bush for that). As a psychiatrist, I am just trying to help others better understand the economic and psychiatric consequences of this year's historic economic meltdown.
I predict this economic meltdown won't be stopped by governments "injecting liquidity" (i.e., printing more money so that they can "spend their way out of debt"). This very approach was tried by Argentina in the 1990's, and it eventually destroyed the Argentine economy (and their middle class).
As I psychiatrist, I see a strong causal link between the economy and the nation's mental health.
In addition, in an economic meltdown, services to the mentally ill are usually the first to be cut by government. Thus every psychiatrist should be paying attention to this economic meltdown.
However, if my posting about this topic is upsetting you, I apologize. Since I predict that the events of next week will be particularly upsetting, I would suggest that my future posts only be read by members who are prepared for bad news.
Uncontrolled Speculation Caused The Wall Street Crash of 1929
I think the current financial "experts" have totally misinterpreted what caused the stock market Crash of 1929. These "experts" blame the failure of the US government in not bailing out the failing US banks for the severity of the Crash of 1929. I believe this analysis is totally wrong.
I believe the Crash of 1929 was caused by the totally uncontrolled speculative stock market boom that preceded the Crash.
Back in the 1920's, investors purchased stock on margin. Buying on margin is borrowing money from a broker to purchase stock. These margins became obscene: for a $1 investment, an investor could borrow enough money from his/her stock broker to buy $27 of stocks on margin. Thus, when the stock went up in price, the investor would sell the stock and make a huge profit from using this borrowed money. (However, if the stock went down, the investor could be wiped out.)
In the 1920's, stock market trading became America’s favorite pastime as investors jockeyed to make a quick killing. Investors mortgaged their homes, and foolishly invested their life savings in hot stocks.
Back in the 1920's, to the average investor, stocks were a sure thing. Few people actually studied the fundamentals of the companies they invested in. Thousands of fraudulent companies were formed to hoodwink unsavvy investors. Most investors never even thought a crash was possible. To them, the stock market “always went up”.
All this speculation, corruption, and mounting bad debt eventually came crashing down in 1929 and wiped out 90% of the entire US stock market. That, in turn, marked the start of the Great Depression of the 1930's.
Thus, the cause of the Crash of 1929 wasn't the inappropriate response of the US government to the bank failures that preceded the Crash. The real cause of the Crash of 1929 was the mountain of debt accumulated by a decade of wild speculation and corruption on the stock market in the 1920's.
I believe we are exactly, debt-wise, in the same position today as U.S.A. was in before the Crash of 1929. The US government is buried in crushing debt and may soon face bankruptcy.
http://www.cnsnews.com/Public/content/article.aspx?RsrcID=33574
We have had more than 2 decades of wild speculation on the stock markets. Many major US financial institutions were making wildly speculative investments. As a result, the world's stock markets became the world's greatest gambling institutions.
Worse still, starting in 1999, the US government started a massive legislative campaign to deregulate its financial markets. Thus the "financial police" were taken out of Wall Street (and the financial criminals took over).
I believe that this economic meltdown won't be solved until the US places tight regulations on the financial criminals that currently run Wall Street. The massive, unregulated betting on the derivative market is the worst example of this financial speculation and corruption. If these criminals are left unregulated, no amount of government bailouts will correct this economic meltdown.
That would mean that these criminals will take us all down with them.
Governments Will Learn
We will get through these difficult times. However, we must learn from the major mistakes that our governments have made that brought about this economic meltdown.
Otherwise, we are destined to repeat history.
Phil Long M.D.
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How To Cope With An Economic Recession
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