Credit Crisis

[5boys2girls]

I was just watching CNBC....don't know why, I can't understand anything they're talking about anyway. Something bad must have happened. They are calling it a full blown credit drisis, not just subprime. They were saying the Fed needs to act swiftly to bail us out? What does that mean? How bad is it really??? On a scale from 1-10. Is this anything new or just the same ol' same ol' we've been hearing. The market people are starting to sound concerned on TV.
Go easy on me, this is not my specialty.

[green-agenda]

10
:candle

[medbiller777]

Just for clarification of the thread...10 being defined as bad?

[5boys2girls]

Yes 10 bad.
Please tell me as a typical house wife, mother....how this will look for me in my daily life? grocery store, gas, household needs? We don't own, we rent, but might be assuming the loan from some friends house.

[green-agenda]

I'm really not sure what to tell you. The credit bubble has been set to burst for months now. When it does no-one really knows what will happen. Trillions of dollars of bad credit have been created by greedy, short-sighted men in the last few years. Now we will all suffer.
http://functionpix.com/index.php/article/The_great_depression_of_2008__the_mother_of_all_de pressions/1647/

The problem is that traders have taken a credit-asset, like a mortgage, and used it as collateral (i.e. borrowed money against it) at rates as high as 90:1 (i.e. borrow $90 for every $1 of mortgages they own). This is called leveraging. They can then take all the money they have borrowed and buy more credit assets (mortgages) and use them to borrow against. So millions of dollars of credit can be generated from one mortgage. If the original asset (the first mortgage) goes under (foreclosure) then all the credit created from it also collapses. That is why banks have been writing off tens of billions of dollars in the subprime crisis, and it is only going to get much worse. The whole system is a farce. Sorry for the bad news.
:ohno

[Look4Truth]

I was just watching CNBC....don't know why, I can't understand anything they're talking about anyway. Something bad must have happened. They are calling it a full blown credit drisis, not just subprime. They were saying the Fed needs to act swiftly to bail us out? What does that mean? How bad is it really??? On a scale from 1-10. Is this anything new or just the same ol' same ol' we've been hearing. The market people are starting to sound concerned on TV.
Go easy on me, this is not my specialty.

9, soon to be most likely 10+.

The problem is they can't fix this problem, game over, can't do it. When (if) the truth finally comes out, I imagine we're going to see the credit crisis reach more than a trillion, just a guess but it's always a lot worse than what they tell us.

The more they print money to try and stop (they can't stop it, only delay) the collapse of the markets, the faster inflation will grow. The more inflation grows, the more they have to print, aka stinky-rotten snowball of doom.

And they're supposed to bail out all these banks and credit lenders too? Nah, don't think so.

Load up on store able goods now while there's still a chance.

[Chula]

So, really, should I shop at Walmart or Target?:scratch



(I know the situation is serious and we are all going to be in for an economic storm) I'm just trying
to make light of the fact that the common man/woman simply has no clue how things work and all they
are thinking about is the sale at the Big Box Store.

[anath]

eek, thanks for the info

[5boys2girls]

Cool, I'm starting to get it.
My daughter said something funny to me as I was trying to explain this to her. She's 11.
She said "why don't they just print more money?"
How do I explain that?
We're homeschoolers too, so this is very cool for a brief economics 101 lesson today. Unexpected, but very welcome!
:)

[Look4Truth]

Cool, I'm starting to get it.
My daughter said something funny to me as I was trying to explain this to her. She's 11.
She said "why don't they just print more money?"
How do I explain that?
We're homeschoolers too, so this is very cool for a brief economics 101 lesson today. Unexpected, but very welcome!
:)

Well, I suppose it's similar to how many prints an artist makes of a certain piece. So, what happens to the value when you print more and more of the same print? Would you rather have 1/1 of a Picasso or 1/10,000,000?

:heh