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Financial Forecast: Gloomy

As Tam said:

In business news this morning ZOMG WE’RE ALL GONNA DIE!!!

So, basically, we have two huge companies and their performance sucks more than Metallica’s new album. The solution to the problem, if you’re a politician or a retard, is to bail them out. What that would mean is our government is going to buy something that nobody wants at a price no one wants to pay with money the government probably doesn’t have to spend anyway. This comes after two other big companies tank. Yeehaw, corporate welfare!

That’s the short term fix. These two companies are heavily regulated, one because it’s basically a quasi-government agency anyway and the other because it’s in a highly regulated industry and in NY. Under such oversight, these companies still failed. The long term solution, if you’re a politician or a retard, is more regulation! Yes because that worked out so well the first time.

In other news, LIBOR had a big one day decrease indicating that banks no longer want to loan other banks money. That means your small town bank may have an issue getting a float from a larger bank.

And in the case of one of the companies, Obama’s economic adviser made major bling running it. That’s a confidence builder.

For a sense of scale, DirtCrashr points out that the Enron collapse was to the tune of $65 billion. Fannie Mae is in at $6.5 trillion. And made a lot of rich Democrats richer.

In times like this, ammo is a good investment. Oh sure, it won’t make you any money but it provides you with some needed stress release.

3 Responses to “Financial Forecast: Gloomy”

  1. Gregory Morris Says:

    Ammo can make money, as an investment, if the price keeps going up. EBRs also.

  2. HardCorps Says:

    Gold had the greatest dollar gain in its history the other day! I’m with you man..and if you want to read more about the economics behind it see mises.org.

  3. Mikee Says:

    Time for deep breathing, relaxation exercises, and a calm perspective on things. The Fannie & Freddie bailouts will have a foreclosure rate of around 1 to 5%, which is very high but which will add up to less than the amount the feds get from the other, good mortgages (which they are taking over at a discount to be announced, but expected to be 30% to 50% of face value). In other words, over time the feds will make money on these two takeovers/bailouts.

    Similarly, the AIG bailout (actually, a revolving line of credit – not all of which will be used at any one time) is going to be paid back in full within about 2 years, at high single digit interest rates. This is a guaranteed profit for the feds. Nobody else would take it on due to the likelihood of having their stock price destroyed if they did so.

    The regulations you speak of – they were changed to allow “naked shorting” last year, and that has been a problem yet to be addressed. But it likely will be taken care of by the end of the weekend. Likewise, mortgages have been tightened back up to more realistic lending practices.

    In short, look at the market today. Reaction to the federal actions are very positive. When the Dow goes up 400 points, what is the increase in total wealth of all stockholders who traded in their stock that day? Lots and lots and lots of people have avoided a breakdown of their personal finances. It adds up.