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Archive for July, 2008

Home Page | FED Up USA

Watch the video, you’ll understand.

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This is really more depressing than I’m playing it.  I’m ticked off about this.  Really.

Mish’s Global Economic Trend Analysis

The Congress is about to approve a bailout of Freddie Mac and Fannie Mae.  This is bad.  Really, really bad.  Here’s the lowdown:

a)  Bail out FNM and FRE.  Protect the assets of a large pool of billionaires who invested in FNM and FRE.  Interest rates go to 10% on mortgages.  Home values plummet.  Average Americans take it in the short two ways:  first, declining home values; and second, we foot the bill for somewhere north of ONE TRILLION DOLLARS in bailout money.  That’s an increase in our national debt of around 10%.  Great Depression II follows.

b)  Let Freddie and Fannie fail.  Lots of billionaires lose lots and lots of money.  Nobody gets a mortgage for many, many months.  Lots of banks go under.  Banks that behaved responsibility totally mop up on the market and make tons of money.  Average taxpayer loses nothing.  Home values stop declining.  No Great Depression II.

Can you guess which way I’m leaning?

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How the stock market works [General] – MarketTicker Forums
Once upon a time in a village, a man appeared and announced to the
villagers that he would buy monkeys for $10 each.

The villagers seeing that there were many monkeys around, went out
to the forest, and started catching them. The man bought thousands
at $10 and as supply started to diminish, the villagers stopped
their effort. He further announced that he would now buy at $20.
This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going
back to their farms. The offer increased to $25 each and the supply
of monkeys became so little that it was an effort to even see a
monkey, let alone catch it!

The man now announced that he would buy monkeys at $50! However,
since he had to go to the city on some business, his assistant would
now buy on behalf of him.

In the absence of the man, the assistant told the villagers. “Look
at all these monkeys in the big cage that the man has collected. I
will sell them to you at $35 and when the man returns from the city,
you can sell them to him for $50 each.”

The villagers rounded up all their savings and bought all the
monkeys. Then they never saw the man nor his assistant again!

Now you have a better understanding of how the stock market works.

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