Well folks, this has been yet another bad economic day. The Asian markets closed low amid credit fears in the United States. Later, European markets fell even LOWER. Now, with Asia and Europe closed, American markets are plummeting today. Hopefully, things will stabilize by mid-week as it will take a little while for credit to begin moving again since the bail-out bill has been passed. The real problem right now is the credit crush. Last week the state of California ran out of money. They can't pay their workers, so Arnold is begging the feds now for $7 billion since he can no longer get credit from any financial institutions. Apparently, Massachusetts is also out of cash now, and they say that they only have 2 weeks of money left to pay their employees (that includes teachers folks). At any rate, these are interesting times. Take a look at the latest here on the BBC's site.
Monday, October 6, 2008
With Bail-Out Passed, Stocks Still Fall Due to Global Fears
Well folks, this has been yet another bad economic day. The Asian markets closed low amid credit fears in the United States. Later, European markets fell even LOWER. Now, with Asia and Europe closed, American markets are plummeting today. Hopefully, things will stabilize by mid-week as it will take a little while for credit to begin moving again since the bail-out bill has been passed. The real problem right now is the credit crush. Last week the state of California ran out of money. They can't pay their workers, so Arnold is begging the feds now for $7 billion since he can no longer get credit from any financial institutions. Apparently, Massachusetts is also out of cash now, and they say that they only have 2 weeks of money left to pay their employees (that includes teachers folks). At any rate, these are interesting times. Take a look at the latest here on the BBC's site.
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21 comments:
woah! out of money!? how does that work? How do states run out of money? Isn't there always tax coming in? Unless the rate going out becomes higher than the rate coming in, is that what's happening?
yeah, essentially. here's the thing: money has always been going out at a higher rate than it comes in, but california has always just taken out credit. with the new financial crisis, credit is just not readily available. you can read about it more at this link:
http://www.ft.com/cms/s/0/587923b8-933f-11dd-98b5-0000779fd18c.html
I think everyone needs to calm down for a little while, don't go pulling all of their investments out, and just wait a while until thinks cool down. If everyone pulls out all of their money, then the market will collapse, and nobody wants that.This is all just coming out of fear...
I found it interesting that the Federal Reserve will now start paying interest on the money banks are forced to deposit. I thought this was huge because obviously interest multiples over time and this has potential of turning the 700 Billion dollar bail-out plan into a much higher number. I would be very interested in what the interest rates they are using are. How long can the government keep giving tax-payer money to these companies before its too much? I also wonder how fast the FDIC would honor their 100,000 dollar insurance to all citizens if the banks were to close their doors (some of which already have) I would assume that the FDIC would first write checks to those who had more than 100,000 in the banks. How long would it take for the money to reach its way to people with less money in the banks?
I also think its funny how people complain about the bail-out plan and say that tax-payers are giving their money to these companies that are being helped by the new bail-out. Does anybody know who actually owns these companies? Its the tax payers. All your major airlines and most of the banks are open to the public and the public owns a majority of the shares. So basically we are giving money to ourselves. The only difference is the government is more or less forcing the public to invest in their own companies. This is pretty much the same thing as the public buying more shares to boost the economy but instead of people buying more shares at the same price, the price of each share will (hopefully) go up and each person will have a creased percent of their equity invested in these companies.
I agree with Trevor in that everyone does need to calm down a bit. People are complaining that the stock market keeps falling but they have to realize that it will eventually come back up but not if they keep selling their stocks. Anyways, why would you want to sell your stocks at this point when things are down this low. What is the point of selling stocks right now at a low price, making the stocks go sown, rather than waiting it out and selling at a later time?
i cant believe that a state could run out of money. and that is crazy that the people cant get paid expecially teachers so are the students on a break of something?
i dont understand how states can run out of money. Especially California cuz thats where everything big is and major movie buisnesses etc. But then again I really dont think that Arnold has any idea what hes doing over there. But if this starts to happen in Ga and teachers arnt getting paid, will school still be in session?
It's a good thing yod don't work in Massachusetts Mr.Prill
what is the credit crunch? i keep hearing it but i dont get what it means.
it's referring to the real problem in the global economy- people are no longer to take out credit from banks the way they used to because banks are strapped for cash. if people stop getting loans (either in the form of a credit card, mortgage, car loan, college loan, etc) money stops moving (we call it a question of "liquidity"). if money stops moving, the economy literally locks up. unfortunately, that's what is beginning to happen in this country in the past few weeks.
holy crapp.
i didnt know we could actually run out of money?!?!
i wonder if california will actually get the money it needs. my brother lives out there and he says hes worried about how theyll deal with this and if it will balance out for the future..
but since more and more states are running out of money, will other states start giving them money or will they just keep it coming from the government?
so if the state is out of money how is everyone getting paid at this point in time because i would assume that it will take a while for california to get the money there asking for. Right?
i just talked to my brother about california running out of money and he said that his school had to cancel some classes because they cant fund them anymore.. thats pretty sadd
yep, that's the case. and 1000s of teachers have already been laid off. sad state of affairs folks.
Oh my god that is not good. China will suffer which probably will affect the whole world economy along with US. This could be the 2nd Great Depression
miss hammond, to respond to your comment, unfortunately many government workers are not getting paid. i want to say i saw a report that stated that 2,000 teachers in that state have already been laid off. dire times indeed.
I just think that it's crazy how much a downfall of the USA economy affected every cornor of the world! Like Germany is preparing themselves for a downfall and even Denmark is?! Weird. It is just interesting how our economy can truly affected pretty much the whole world in a good way, or it could be in a bad way too!
I agree with Trevor, that if people vpull out their money now, then when it eventually goes up, they have lost money. just because the bill got passed, doesn't mean its gonna have immediate effect, its going to eventually rise back, if in real the bill does work.
ok so along with what u said today, about Georgia being one of the eight states that will most likely be running out of money soon...how will that affect us? i mean...are we talking a second Great Depression...or just a little impovershed for a month or two????
I was actually talking to my dad about the stocks today. Supposedly went down another 700 pts or something like that? Insane.
I do agree with several people that posted. People really need to relax in this time of crisis. Not completely ignore the problem all together, but this whole issue was brought upon us out of fear. Right now is the best time to be buying stocks. They're rather cheap at this point, and it'll definitely help the economy. When all things are going well and you're making a profit, sell. We shouldn't be selling every stock we own because we're worried that we'll lose our money. Humans are too money hungry. If we keep at it that way, we'll just enter a second depression.
Despite the $700 billion dollar bailout bill the economy is still failing. The only thing people are doing now is selling things because they are afraid. Investors are getting rid of everything because nothing is working. The main problem is fear. I found out that other countries are struggling along with the U.S. At least were not the only ones.
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