Posted by: randommisfires | October 13, 2008

The stock market rises

And everyone breathes a sigh of relief as life looks like it’s getting back to normal.  But, might I just pose a quote from Iligari at the Automatic Earth?

An interesting issue came to the surface today. With all these governments, spending trillions of dollars of taxpayers’ money, turning into large-scale owners of the banking industries in their countries, can the banks still proceed to foreclose on the homes the taxpayers live in? That would mean people now would have to pay to lose their homes.

Plus, of course, foreclosing is an expensive process for banks. Another cost for the same taxpayer. It gets better: the foreclosed homes would have to be sold, and since that always happens for -much- less than their “paper value”, that brings down the value of neighboring properties even more. In those homes, too, live taxpayers.

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Responses

  1. Yeah, it’s scary, scary, scary. All the bailouts may buy us a temporary reprieve, but all they are going to do in the long run is ensure that the crash will be much, much worse. And no one with the power to do so is even talking about the right way to deal with this.

  2. I agree with Dave. There are still some *major* problems with the worldwide economy, and I’ve heard it from enough economists now to believe it. The stock market largely fluctuates based on emotion, not fundamentals. The upswing today was just from people wanting to get in on the rebound, not because there was any real justification for extreme optimism. If you waited too long to get out the first time, I’d consider taking advantage of this rebound to recover some losses put at least most of your savings in a more secure place than the stock market. After the 1929 stock crash, it largely rebounded, but many of the same problems that we have today led to the Great Depression setting in over the following couple of years. Let’s hope for the best, but plan for the worst.

  3. I wondered how this was going to work – the government bailing out the banks and then basically owning them. I don’t think it’s such a good idea to have the government own the place I keep my money.

  4. Oh, and I have been reading that website – Automatic Earth – since you last mentioned it – talk about heavy reading!


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