BOOM! CRASH!

This isn't really a surprise, rumors have been flying for weeks that at least one more financial giant would fall.
But two in the same weekend is a shock.

Break out those piggynanks kids, it's gonna be a bumpy recession.
Is AIG next?

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I kept saying last year (even on BWW) that we were heading right into a depression (not recession) from the horrible botched real estate situation.

...and that the housing market was 3 times as high as it should be in order for people to actually be able to afford the houses they were in.

Yes, I'm wagging my finger now and saying, "I told you so."

This ain't over yet. Housing prices are STILL too high. No more "phony money" loans, where you pay a fraction of what you should be paying for 18 months and then watch your mortgages triple. That was designed for a house-flipping market, where you sold your house before the price went up. But that's a Pyramid Scheme. I can't believe the banks didn't see it. In truth, I'm sure they saw it, and didn't care, as long as they were making their "phony money" on paper. "Look, my $50K home is now worth $800K!" Well, no, it isn't. Because that's not a price that anyone can actually afford to pay off. Ever.

America isn't going to start recovering as a nation until it starts making THINGS again. We don't make them anymore. We make fake money by telling you "in theory" how much something we already own is worth, but the tangible "things" we used to make and sell are nearly all being made overseas now. Cars, toys, even DVDs and their packaging. The only people getting rich are the Americans who own those companies, who are farming all of this work out overseas because it's cheaper. So, 5 people who own the companies get rich, while the rest of us stopped making "things" and just told the world that our houses were worth millions when they weren't. And meanwhile the sweat shops overseas are on over-time.

I'm no expert in finances, but I can see the logic of it... and our national economy is in serious trouble.

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Washington Mutual is next.
I give them a week until bankruptcy.
The dominoes are falling.

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I'm a history buff. I used to beg my mom to tell me stories what the depression was like. Now I get to see for myself.

WaMu will probably go sooenr than later- with the shock of two big firms collapsing, people will be senselesly yanking their money out of the markte this week. We could see a few surprises.

"CHICAGO (AP) - Democratic presidential nominee Barack Obama said Monday the upheaval on Wall Street was "the most serious financial crisis since the Great Depression" and blamed it on policies that he said Republican rival John McCain supports.
"This country can't afford another four years of this failed philosophy," Obama said after the shock-wave announcements that financial giant Lehman Brothers was filing for Chapter 11 bankruptcy while titan Merrill Lynch was being bought by Bank of America for about $50 billion.

Obama's statement, issued as he prepared to fly to Colorado to begin a swing through contested Western states, was intended to serve two purposes: to link McCain with the unpopular presidency of George W. Bush and to express sympathy with the anxiety of most Americans who say the economy is issue No. 1 in the election.

"The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren't minding the store," Obama said in a statement. "Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression." "



Breitbart

Updated On: 9/15/08 at 10:38 AM

The media needs to start focusing on the Depression and draw the significant parallels of the dangers of panic. I keep thinking of train imagery for some reason...like the Republicans got caught text messaging at the wheel. For eight years. Agh.

In one weekend we went from 5 investment banks to 2.
You can't diminish the astronomical impact this will have as the trickle down effect begins.

Simply unprecedented.

The good news is that at least Morgan and Goldman seem to be sturdy.

I don't think people are going to start withdrawing just yet, these are business banks (for the most part) not consumer banks.
If WaMu goes however, prepare for the worst.

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No, these were the blow-dried airhead local anchors.

"I certainly don't fault Sen. McCain for these problems," Obama said, "but I do fault the economic philosophy he subscribes to."

Because it was Phil Gramm who wrote and pushed through the deregulation legislation. He tacked it onto the budget package passed in 1999 (which Clinton, already on his way out, signed).

Oh, it's never ONE person. It's always an ideology started up by one or two or ten people who prey on the egos of that vast group.

Relax. It's not real. Remember, Hillary is manufacturing all of this to f-ck with us.

ARE housing prices still too high, though? I thought they'd been driven well below value because of the mess of the economy. I'm not saying that flipping didn't artificially inflate the market, but I don't see how much lower prices can go.

As for pulling your money out, I don't know what I'd do if I actually had money. After September 11, people were told to hold tight, and most people I know who didn't liquidate things lost a lot more money than those who did.

Yes, Ghost, housing prices are still way too high. The simple math of "average income vs. average housing" is still not adding up. The other shoe needs to drop.

They can go a lot lower. Back down to where they SHOULD be.

The only people saying they're down far enough today are the ones still deeply in denial about how out-of-control things are.

Oh, wait... that's almost everyone then.

Find the average salary for any given area. Multiply by 3. That's how much the average house should go for in that area. If it's more than that, the average buyer can't afford it, without taking one of those "phony money" fake-loans that can't be paid off.

There's no real market then. Just the fake one. The pyramid scheme... which would start all over again.

Over the next year, if my non-professional guesstimation is correct... you'll hear the sound of that other shoe dropping.

And it won't be pretty.

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