Dow Plummets & Unemployment rises
Original post made by Mother of a Marine on Mar 6, 2009
on Mar 6, 2009 at 10:22 am
Hi. First, thank you for your son's service and I hope he returns home safely.
We were in dire straits well before the Democrats took over Congress (and with only a slight majority). Depending on where you draw the line, my opinion is that we started the current downward spiral in 2006. A conservative banker I know think it was 2005 while others think earlier with the dot.com bust. But the general consensus the decline was started sometime ago.
The decline in Dow started 2007... I know personally...unfortunately.
With easy credit home owners were taking cash out to spend thinking their house value would go up and they could either refinance again or sell out. The cash out then would be used to buy things. We had an artificial economy. That is, money came from paper appreciation rather than from good old fashion hard work.
For home buyers, including investors, they were buying homes with little or no money down. Speculation was rampant. As my brother would say about the stock market, the "greater fool" thinks someone will pay more for the stock (or house) they just bought and turn a quick profit. Oops... only worked for a few in the beginning.
Lastly, some folks on Wall Street packaged deals with fancy names to sell to foreign investors with income "guaranteed" by the high interest rates from sub-prime loans (borrowers with bad credit or shaky real estate properties such as home in an industrial area). These went bust. There is certainly a lot more to this story but I think this gives an overall view.
on Mar 6, 2009 at 11:02 am
Posted by Dublinmike, a resident of Dublin,
You paint a fair picture, and yes, there is a lot more. All political parties are fair game for blame. Lots of Americans are fair game for blame. Wall Street, Main Street, the Neighborhood Street and here's a new one, the World Street share in this blame.
on Mar 6, 2009 at 11:08 am
This pretty much sums up the situation. From Wednesday's Daily Show: