Why the Treasury's bailout plan must be taken seriously.

artiesliver · Sep 24, 2008

Look at it this way...let's say you owed the bookie $1,000 but couldn't make good on the payment and neither could several of his other customers, he wouldn't be able to pay his debts to customers or bigger bookies. Now those guys are out money and can't pay their debts or spend the money as consumers. Now that they can't spend money your bar has less customers and you are no longer to pay your other debts and so on and so on and so on. The house of cards just continues to fall and the system fails.

But....let's say someone stepped in (ie. the Gov't) and said they would assume the debt the bookies are owed now for $0.30 on the $1.00. However, the debt would be worth $1.00 in some period of time and they would make back their original investment of $0.30 plus a profit of $0.70. The catch is that the original $0.30 was financed by the public. The public's initial reaction may be "Why should I finance this debt when the bookie knew he was dealing with deadbeat customers (ie. home buyers w/sh!tty credit)?" The answer is if no one steps in to help the bookie collect some of the debt he is owed, the system locks up and we are faced with the scenario in the first paragraph and EVERYONE is affected because the credit system failed and no one has any money to spend.

Kind of the simpleton's way of looking at it, but it is the reality we are faced with in this country (and soon the world) right now.

artiesliver · Sep 24, 2008

Who's to blame for the crisis we are in now? Many participants are to blame. The Greenspan Fed for letting money remain so cheap for so long, the banks for lending to deadbeat home buyers, the home buyers themselves for not being responsible and paying their debts, the other banks for buying the debt of the lending banks because of greed for the profit they would make from a "haircut" here and there by repackaging the loans, the insurance companies for insuring the repackaged derivatives, the gov't for careless spending and for creating a record deficit, etc.

barman · Sep 24, 2008

AL....Islanders here on Oct 16, which coincidentally could also be the back end of the ALCS

Otherwise, no TBL/NYI until early February

artiesliver · Sep 24, 2008

That's probably a good thing (only once until Feb) for the Isles. NYI--A team that will not improve from last year and remain pathetic.

Wish I could get down there for the game (and squeeze in the ALCS as well), but I am planning a trip or two out to South Bend to see the Irish in November (not to mention that I am lobbying for a trip w/the boys out to LV in January), so I am carefully picking my spots w/Mrs. Artie.

Was originally planning on coming down for NYY spring training, but it looks like there may be another member of the Artie household in April....stay tuned.

barman · Sep 24, 2008

APRIL?....minus 27 weeks = HOLY COW

artiesliver · Sep 24, 2008

There's the cow reference again.

27 weeks, wow...never looked at it that way. I hope I don't miss Opening Day at the new Stadium. I guess I will have plenty of time to sit w/the new one in front of the big screen watching the Yanks (given the only way the Isles go to the playoffs is if they buy tickets).

I just hope my job is still there in April. Otherwise, Mrs. Artie will need to get two jobs (hahaha).