The Economic Crisis

[rocketman1555]

i think that the reason that the dow went down after the first vote failed was that people got scared and didn't let the market run its course, they were worried it would fail without this boost, so they made it fail when the bill didn't pass

[bah]

Apparently, the rescue plan didn't do much yet.

Stock market tumbles. Dow Industrial Average has lost 1,400 points in 5 sessions.

Federal Reserve hints at cutting the interest rate.

Federal Reserve is pumping liquidity into the financial system in historically unprecedented rates.

Federal Reserve is now opening a facility to buy up commercial paper to try to unfreeze credit markets.

AIG has already sucked out 61 billion out of its 85 billion dollar loan in a matter of weeks. It hasn't helped yet.

Discuss. What shall happen? What is the extent of this mess?

[rocketman1555]

i think we're sunk, because europe started going down with us, i think no matter what we did the stock market was going down because people started thinking it was insecure when we started discussing the bailout, so they are withdrawing from it

[eak227]

A big key to economics is expectations. No matter what you do, if no one expects it to work, then guess what? It won't. No matter what anyone does, no one is going to support it these days. Faith in the government, the Fed, anyone, to bring out of this is not very high right now. The media is not helping either.

Ergo, I think that until people at least restore their faith that the entire economy isn't about to collapse at an moment, we won't see too much improvement. Personally, I think the new government, with whoever happens to be leading it, will find themselves in a great position to look like the hero for not doing too much of anything, simply because people's attitudes might change with the change in leadership. But we'll see.

[rocketman1555]

My friends and i were joking the other day about how we should have used the bail out money to buy large amounts of land in other countries then sell it to whoever wants it to make money. It worked after the revolution, why not now?

[bah]

Latest news: The Federal Reserve lowers the Federal Funds rate from 2% to 1.5%.
Stock market futures move into the positive in response.

What say you?

[rocketman1555]

YAY, we're not quite screwed

[smartkid222]

dow jumps 938 points as government pledges bank aid. That's over 11%

[gh]

gh, what does Google Finance say about the Dow Jones Industrial Average?

*picks up mouse off of mousepad*
It's over NINE THOUSAND!
*crushes mouse in hands*

WHAT, NINE THOUSAND?

[bah]

I suppose the recent bout of government intervention will calm things down in the markets for a while.