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Whatever the politicians do, we as a society are going to be poorer than we were. We've lost credibility with foreigners; they will be less likely than before to lend us endless amounts of cheap money. Will that ultimately lead to higher borrowing costs? It's hard to see how it won't.
Coping in this new world will require adjustments by millions of Americans. We all will have to start living within our means — or preferably below them. If you don't overborrow or overspend, you're far less vulnerable to whatever problems the financial system may have. And remember one other thing: the four most dangerous words in the world for your financial health are "This time, it's different." It's never different. It's always the same, but with bigger numbers.
http://www.time.com/time/business/articl...-6,00.html
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A lot of the foreign countries are right in there with us. They are suffering from this too, because they bought a lot of the paper/instruments that were backed by the sub/prime mess. Greed and stupidity, with a good dash of fraud thrown in, got us into this and it was worldwide.
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There are financial problems all over the world but monitoring the various sites across the globe most of them, I'm sorry to say, cite the US sub prime mortgage business as being the main cause as so many companies are international and multinational so are linked either directly or fairly close to US problems.
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VDP, I heard earlier today that the British version of our SEC (Securities and Exchange Commission) was banning the short selling of US financial institutions until sometime in January. Apparently a lot of the hedge funds are based in London and they are being accused of manipulating the US financial stocks by short selling. Looks like a good move. There are also a couple of firms in the US that have now said they will not loan their shares of US financials to short sellers, which should also help.
It is a shame when speculators and crooks try to destroy reputable companies just to line their pockets. I hope some of these people do get prosecuted and sent to jail.
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maco, did you lose some money in the wall street thing? If so, sorry to hear.
Many of us, by the way, have been living within our means for a long time. Not taking on risky home refinances, carrying no unsecured debt, no revolving credit card balances, saving modestly, spending cautiously, living comfortably. We've ridden out weird economic cycles before, I expect we can do it again.
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i might be a crazy liberal, but i'm with guitarist on his last comment.
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rgG wrote:
VDP, I heard earlier today that the British version of our SEC (Securities and Exchange Commission) was banning the short selling of US financial institutions until sometime in January.
I might be wrong but as far as I heard it was short selling of any financial stock is to be curtailed until January although it will be reviewed after 30 days.
Also:
"US stock market regulators also announced new rules this week aimed at curbing speculative "naked short" sales that aim to profit from falling share prices. Short sales are designed to profit from a declining share price by an investor or broker arranging a sale of a share he does not own but has been "borrowed" on an agreement to return the share at a future date."
When the world's finances are good then short selling doesn't show up so much but when things are not so good then it can greatly exacerbate the situation.
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guitarist wrote:
maco, did you lose some money in the wall street thing? If so, sorry to hear.
Many of us, by the way, have been living within our means for a long time. Not taking on risky home refinances, carrying no unsecured debt, no revolving credit card balances, saving modestly, spending cautiously, living comfortably. We've ridden out weird economic cycles before, I expect we can do it again.
Thankfully no, other than the value of some IRA's.
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I agree with GMan, although people that have followed that good advice are now being penalized. I worked hard to pay off my home loan several years ago, I closed all my credit cards, I have no car loans or anything else, and I've been putting money into savings. Now with interest rates not even keeping up with inflation my savings are losing ground every year. I'm disgusted with both political parties for allowing this to happen. At least I'll have a place to live.
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