<p>WS is happy to make a market so long as it is easy $$$$. As soon as it gets tough they bail. Banks and S&L’s have their problems but they are in the business for the long haul and take a different approach. That’s the problem with WS–they don’t plan for the downside–or actually their plan is to pull the plug and run.</p>
<p>I’m afraid WS only helps themselves.</p>
<p><a href=“http://www.marketwatch.com/news/story/investors-shouldnt-expect-much-fed/story.aspx?guid={70B9E9E9-1107-4F6F-8B2D-98A3D1581F03}[/url]”>http://www.marketwatch.com/news/story/investors-shouldnt-expect-much-fed/story.aspx?guid={70B9E9E9-1107-4F6F-8B2D-98A3D1581F03}</a></p>
<p>Back in August I wrote
Well, look at the news today. The Fed is bailing out Bear Stearns.
So the wheeler dealers at Bear Stearns have long since cashed their outrageous bonus checks and are set for life. Meanwhile the junk mortgages they helped foist on the economy have led to record foreclosures and evictions. Don’t hold your breath for someone to help the average Joe, but you can sleep better knowing the investment banks are being bailed out and their multi-billion dollar bonuses will be able to continue.</p>
<p>Just as I predicted, nobody will admit that when the average person suffers it’s just too bad, but when it affects the big boys its time to act. No, its “liquidity”, just like I said back in August.
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<p>Oh, yeah, Bush has chimed in too with the importance of the markets.
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<p>You called it back in July!</p>
<p>Multi-million dollar bonuses would be more accurate. Billions are reserved for private equity firms. The choice always comes down to which is worse overall–failure or bailout.</p>
<p>Did not the emperor say a couple of weeks ago, the economy was OK? He just keeps, doing it and doing it.</p>
<p>With psychology a big part of the markets there is a need for cheerleaders on both sides. UCLA which correctly called the last recession when few did is saying it will be a brief downturn. In economics everyone has an opinion and only half are right each time. I believe he said something less positive yesterday himself. The last thing we need is a Jimmy Carter type statement at this time.(malaise blah blah blah)</p>
<p>[Bush</a> Acknowledges Economy Troubled: Financial News - Yahoo! Finance](<a href=“Yahoo Finance - Stock Market Live, Quotes, Business & Finance News”>Yahoo Finance - Stock Market Live, Quotes, Business & Finance News)</p>
<p>I had some younger co-workers who were anxious to buy their first home. They saw house prices sky rocketing here in So.CAl . They were spending between 40 to 50% of their disposable income on the mortgage alone. They coundn’t even afford a stick of furniture. Where’s their logic? THinking with their heart not their head!</p>
<p>Time after time some markets in Cali have hit highs many thought were ridiculous only to top them a few years later. Calling a market top is always tough. Would you like to be owing one of those ridiculous priced $100,000 homes they were selling around SF or parts of LA in the late 70’s? Or the overpriced $150,000 home I rented in Seattle in 1991 that now is worth $650,000 or so.</p>
<p>barrons, maybe I should have made it clearer that the bonuses I was referring to were the aggregate paid by Wall Street firms. And it is indeed billions
Now we can watch the Fed and Treasury bail out the hedge funds, the Wall Street firms, etc. Of course it won’t be as direct as handing them money. They’re bright boys. So they’ll hide what they’re doing, at least enough to confuse the average man on the street – who understands that when the gov’t gives money away directly it’s a bailout but when they pass it thru a few hands (accepting bonds from party A in return for “loans” who then lends the money to B) its not so clear what happened. Of course when B decides not to pay A back more than the junk bonds are worth, and then A tells the Fed to keep it’s collateral, its hard for the average Joe to connect the dots and understand the gov’t paid face value for junk debt and stiffed Joe and the rest of the public for the difference. And this is just the early stages. You can expect the sleigh-of-hand will become slicker as they go farther with this stuff.</p>
<p>And its indeed the average Joe who’s going to pay for all of this. In our “ownership” society taxes have been lowered on money earned outside of a paycheck; hence the low capital gains rates and the tax rate of 0% on inherited wealth (at least if Bush gets his way on what he labels the “death tax”). The Republicans – working hard to turn this country into a banana republic with the very wealthy and the peasants.</p>
<p>I can’t believe how many seemingly intelligent people have fallen for the right-wing propaganda about the “death tax”. In reality, its all about making the country safe for inherited wealth. If you inherited a chunk of assets worth $5 million 40 years ago, watched it grow and lived off of the income it spun off until your death, you have paid $0 in taxes on the assets because you never sold them. If you got the 10% average stock market return over time, you leave $226 million for your heirs. The way the tax law works, they don’t owe capital gains when they sell except for the value above $226 million; their basis is the value they day they inherited it. So you never paid any taxes on it, except for what you sold or income it generated. Now your heirs get to play the same game. Meanwhile Joe on the street pays taxes on every penny he earns, and if he works in a restaurant he better include those tips in his return!</p>
<p>As Warren Buffet says, he pays 18% on his $46 million dollar income, while his secretary pays 30% on hers. [Billionaire</a> Buffett still complaining his taxes are too low](<a href=“http://rawstory.com/news/2007/NBC_Warren_Buffett_wants_more_taxes_1030.html]Billionaire”>http://rawstory.com/news/2007/NBC_Warren_Buffett_wants_more_taxes_1030.html) To his credit, at least he thinks its wrong; but the majority of the Republicans want to see the rich pay even less.</p>
<p>I don’t even want to think about the waterfront house we owned in Bellevue in 1980. But we couldn’t eat the scenery…</p>
<p>25% of gross income? I think the benchmark should be 25% of net income. Personally I wouldn’t feel comfortable with committing more than 30% of what I make net of taxes to mortgage payments. Because I still haven’t added the 10% for taxes and insurance. Financial responsibility? Quel horreur!!! </p>
<p>A house is a place to live. Not an investment. And nobody should EVER think of their house as anything other than what it is: housing-a place to live. If you want an investment, buy a second home.</p>
<p>Joe on the street pays jack to the feds except for SS and Medicare. As much a Mr. Buffett may dodge it, the top 5% income pay well over half the total income tax. The bottom 25% pay nearly 0%.</p>
<p>Anyone who does not consider potential housing costs and investment value when locating a job is leaving lots of wealth on the table. I would never take a job in Cleveland over Chicago or Seattle. In the long run you arer losing hundreds of thousands. Pick your location like you pick a stock.</p>
<p>futurenyustudent - tell your parents they should be proud of you; job well done on their part…and good luck to you!</p>
<p>“Joe on the street” pays sales tax, excise tax, property tax, gas tax, etc. etc. etc. And his SS tax payments are funneled out of the SS system and used to pay the government’s obligations which aren’t met by the other taxes - because they’re too low to balance the budget. The top 5% pay more gross dollars in income taxes because they have more income - 3 times the combined income of the bottom 50% of taxpayers (forget the bottom 25%) When you look at all the taxes paid by individuals at all ends of the economic spectrum, it’s crystal clear that the poor and middle class pay a higher percentage of their income in taxes overall than the wealthy do - and that’s not even taking into consideration the tax-free acquisition and transmission of wealth due to the already-generous estate tax exclusions. </p>
<p>The slick sound bites have been well honed, and Barrons no doubt hears them every day, but the fact of the matter is that the middle class - particularly the lower economic levels of the working class - are getting screwed.</p>
<p>
I remember a seemingly intelligent liberal friend of mine buying into the left-wing propaganda of 100% inheritance tax - until he inherited some money himself.</p>
<p>U-U-Dad, I find it sad that you seem to inhabit a community occupied exclusively by people whose only idea of social equity is “What’s in it for me?” I guess that explains the current state of our nation - having hocked our children’s financial future in the equivalent of a third of a year’s GDP just so a few very rich people can get even richer… “Seemingly intelligent” indeed.</p>
<p>So, do you think there s/b a 100% inheritance tax and much higher taxes overall? Actually, the anecdote I stated was a true one.</p>
<p>And if it wasn’t obvious, my use of the term ‘seemingly intelligent’ was facetious based on the OP’s condescending use of it.</p>
<p>AHHHH, all the taxes, mostly state and local in your own example. And of course you ignored that my post was only about Fed Taxes. Local taxes vary all over the place. Oregon has no sales tax and a progressive income tax so the poor are not paying much in Oregon. Talk to your Gov and the Mayor about that. While the government is borowing on your SS you certainly will get a significant benefit on that later and the poor get more out than they put in. Any analysis that excludes that is bogus. And don’t even start on the costs of all the services that the poor and middleclass use. The rich are not using much of them. And unless NPR is broadcasting what you say, I don’t hear it, ever.</p>
<p>
ucsd_dad, you seem to have an unusual way of interpreting what you read, to say the least. I meant not a whit of condescension, although I doubt you will believe (or understand) that. Plenty of rational and intelligent people parrot right-wing arguments. Against the estate tax. About the reality of global warming. Some still harbor a belief that Iraq was strongly tied into the 911 plot. In other words, the world-view of Fox News. They’ve heard the same propaganda so many times they accept it. It is to these people I was referring. Not you. I can see you’re a true believer. Intelligent, and a true believer. No “seemingly” about it.</p>
<p>Nice of you to throw out the straw man of the 100% estate tax rate. While I’m sure you can find someone arguing for that rate, they’re in the decided minority. Most people want a tax rate on huge estates similar to that of ordinary income, or at least the capital gains rate as a bare minimum. Not the straw man “take it all!” you seem to posit.</p>
<p>Then again I’m not too surprised by your post. You are the same person, after all, who back on 8/3/07 opined that consumers should not be allowed to discharge their debts thru bankruptcy. Period. Grandma has cancer and is about to lose everything she has saved all her life, take everything pay off the debts! And this is no imagined scenario. Medical bills are the leading cause of bankruptcy. Apparently you don’t have problems with a 100% estate tax rate provided the estate goes into private hands and not the government, eh?
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