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As we all know we are in a financial crisis. Now I am no expert but I do my research and pay attention to the important topics and info. I want to share a “break down” of the economy. It started several years back when there was a housing boom and the housing market was flooded with people buying and selling homes. What the problem was the companies providing loans, such as, mortgage firms, banks, etc. where allowing people to get loans for homes that simply were not qualified and almost knowing that they would not financially be able to repay the loan. Why would a company do this? Because they were making some serious $$$ on commissions and other fees. These companies raked in billions in profit.

Now the problem arises a few years later as the people can not repay their loans. Main reason is as a country as a whole we have borrowed way too much money. What happens when we borrow money from other sources, for example, foreign interests? Our interest rates go up and your minimum payment goes way up. Now what if these foreign interests that we borrow money from want their money back? Well then I guess China will own the U.S.A and it will become the U.S.C (United States of China). Now the reason we are borrowing money is obvious. WAR. We have wasted about 600 billion in Iraq. The national debt is now at 10 Trillion. And usually a country’s economy does well during a time of war. Howard Stern did say before president Bush was elected that if he was to win he would bankrupt the country. I don’t think he was too far off from that comment.

As I mentioned above people fail to make their payments because their payments have gone up. And many peoples pay checks are remaining the same or losing their job while gas, food, and everything else has skyrocketed. As people don’t pay their bills the funding institutions such as Fannie Mae and Freddie Mac ran into trouble. So on 9/7/08 Fannie Mae and Freddie Mac were taking over by the government. And at the same time companies such as Bear Stearn, Lehman Brothers, AIG, Merrill Lynch, and WaMu lose a ton of money.

Speaking of these companies lets have a quick “break down”. Bear Stearns was founded in 1923 and was sold to JP Morgan in which it merged with them on 6/2/08. Then AIG who was founded in 1919 in Shanghai, China and was funded $85 billion by the government on 9/16/08. Also, Merrill Lynch founded in 1914 was acquired by Bank of America on 9/14/08 for $50 billion. Next, American founded company Lehman Brothers was founded in 1850 and it collapsed and was granted bankruptcy on 9/20/08. Why did the government bailout AIG and not Lehman Brothers? From my understanding AIG was granted the money because there are so many foreign investors that would have lost so much the global economy was at risk. Now Washington Mutual WaMu was founded on 9/25/1889 and was sold on its 119th anniversary 9/25/08 to JP Morgan Chase. What is crazy about this is the CEO Alan Fishman had been on the job 17 days and was contractually guaranteed $11.6 million in cash severance and $7.5 million signing bonus. He netted just under $20 million. If this is not corruption what is?

Now the government wants to bail out these firms with $700 billion. Lets see the “break down”. They want to give taxpayers $$$ to companies that gambled on the sub prime housing market. As we saw that failed and these companies did too. Now giving these companies $700 billion is like giving a person with a gambling problem that money. Should we take that gamble?

Article By: Roadhead Rules

Democrats and Republicans on Capitol Hill immediately blamed each other for the failure of a $700 billion bailout package in the House on Monday.

House Minority Leader John Boehner, R-Ohio, said there would be no revote on the bill on Monday because members had left the Capitol.

It was unclear in what form the congressional leadership would bring the bill back to the House floor.

The stock market immediately dipped hundreds of points after it became apparent that the bill would fail. The Dow closed down 777 points at the end of trading Monday, a record plunge.

The package, which was backed by both the Democratic and Republican congressional leadership as well as President Bush, failed in the House by a vote of 228-205.

Nearly 60 percent of Democrats voted for the bill, while about a third of Republicans supported it.

Source: CNN

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Stocks Crushed

Approximately $1.2 trillion in market value is gone after the House rejects the $700 billion bank bailout plan.

Stocks skidded Monday, with the Dow slumping nearly 778 points, in the biggest single-day point loss ever, after the House rejected the government’s $700 billion bank bailout plan.

The day’s loss knocked out approximately $1.2 trillion in market value, the first post-$1 trillion day ever, according to a drop in the Dow Jones Wilshire 5000, the broadest measure of the stock market.

Source: CNN

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