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Banks are flailing and expendable income is almost non existant for much of the middle class. We continue to raise interest rates and people are losing jobs by the thousands.

Not trying to be political although I know it will turn that way but I have to wonder if high inflation is better than trying too quickly to turn it around. Sure seemed to be much better when fuel was half the price it is now and houses were going for rediculous amounts because interest rates and jobs allowed for it. now we have high prices, less income going into the economy and banks/millionaires going under and getting bailed out by us taxpayers. Seems rather counter intuitive to me.

I don't think the jobs part is true.  I think employment is high, which is part of the problem with the inflation.  When everyone is employed, everyone has money, prices go up.

I mean...it's definitely a political issue, but it's not a right/left issue.  The independent Fed makes the choices.  I really don't know what's best.

It's one of the ways to take advantage of the system if you have money, though.  When rates are super low, borrow for cars, mortgages, do refinances, etc.  When rates are super high, use cash.


Fuel is a tough one because it's a wordwide market and the external forces are so strong.  We had dirt cheap gas there for a while, but it was because Russia and the Middle East were trying to squeeze each other out by overproduding and then BAM! -- a pandemic where nobody is driving and the market is flooded with gas.  And even super cheap gas isn't good.  It's good for you and me to put in our cars, but it causes other issues.

Everything is about balance with these things.  If you do something in column A, it's going to hurt B and help C.  ...and it's just trying to figure that balance out.  I am certainly not qualified to have an opinion.

It's a cycle, we get into this mode where people think the free market is the end all be all of everything and then corporations exploit the free market, the politicians and the institutions to make as much money as possible and that in turn wrecks the economy. Then the government HAS to take steps to bring everything under control. Hell Arkansas is celebrating the re-introduction of child labor for fucks sake.

Lots of government control = great for the middle class.
No government control = great for the top 1%.

It's no coincidence that the most prosperous the middle class has ever been in this country has been in the 50s and 60s. That was the consequence of 90% tax rate on the upper earners and a slew of government regulations stemming from an almost total dominance of the government by FDR democrats, and very strong union participation.

It's also no coincidence that when the republicans started pushing through de-regulation in the 80s, (followed by clinton in the 90s) that the standard of living started dropping and that middle class earning became less able to provide for a family.

At one point a middle class single income could buy a house, 2 cars and put kids through college. Those days are long gone.

Yeah, as I've aged more, I realize that capitalism is great as part of a whole, but when you just let it do its thing that wealth destroys things.  People will come into an industry, run it into the ground to maximize profit and then get out while the people suffer.

That's kinda what's happening to the housing market right now.  Corporations are buying up all the houses, jacking up rents -- it's gonna cause the entire market to crash, but they don't give a shit.

To CF's point, we have kinda made profits capitalism, but socialized loss.  That's bad.

I do think that government needs to intervene, but they should own part of the asset they bailed out on the other side of it.

The government should have nationalized the banks they bailed out in 2008. If something is "too big to fail" it should be "too big to exist"

Isn't that's what always happens though? People have always jumped on the new bandwagon if there's money to be made. If corporations are going to buy up all the housing and create a bubble. They're still going to be holding those assets when the bubble pops. Then the balance sheet isn't looking so good. Look what happened to Carvana.

Unless you have negative equity, it shouldn't matter if a market crashes or not. If you sell in a down market, you're buying in a down market. If you sell in an up market, you're buying in an up market. It all levels out if you haven't done stupid shit in the past. It's all cycle

^ No, not really.

Meanwhile, while these rich people are playing the markets, I still need a place to live.  For me, housing isn't an asset.  I have to have a location to raise my family.  So, I can't wait out the market.  I can't buy low and sell high.  

So, sure...a company's assets go up and down, but ultimately they get out, maybe they take a loss...but I lose my house.  The stakes are just so much higher for people.

And I'm lucky.  I'm in a good spot.  My friends literally can't afford to live here because their rent is 3X what it was like 5 years ago.  Ultimately it will crash the market, some companies might file bankruptcy that have a bunch of assets, but those people who owned those companies already made their money.  They don't care.

Meanwhile, the housing market here crashes, I lose a bunch of value in an asset I live in and we can't staff the Dunkin Donuts because you can't serve coffee and live in South Florida.

The Fed has pretty much explicitly said that too many people have jobs, and the interest raises are being enacted to "cool down" the labor market (i.e. make people lose their jobs).

This is the shell game.  Over the last couple of years, due to a combination of COVID payments, expanded unemployment benefits, and a solid labor market under Biden, a historically large number of poor and working class people have money in their pocket.  The corporate response to this situation is to drastically raise prices and tell everyone that it's "inflation," but you can tell that's a lie when these corporations are posting record profits (https://thehill.com/business/3756457-corporate-profits-hit-record-high-in-third-quarter-amid-40-year-high-inflation/).

The Real Problem right now is that too many of the littles have money in their pockets, which means that they are getting feisty and demanding better working conditions.  Look at the number of labor actions over the last year!  New unions are being formed, existing unions are striking for better pay and benefits.  And the ruling class figures that the best way to tamp this down is to increase financial insecurity.  So we will see this "issue" framed as out-of-control inflation and be told that we must endure some suffering, instead of taxing corporate profits.

Believe it or not, I do respect pondwater's position.  Even though I don't agree with it, it's ideologically consistent.

I just don't think that we truly have the cojones to do nothing.  ...what we do is "do nothing" until shit fails and then do something to fix the broken shit.  It's the worst of both worlds, but it's the reality.  As much as I'd just love banks to fail that do stupid shit and take dumb risks, I ultimately don't want the economy to fail and my kids not to eat out of principle, so we prop it up and let those who did it get rich.  It's really fucked up.  I'd prefer the regulation side where we stop it before it happens, but I certainly do understand the idea of a completely free-market.  It's just not realistic in our world.

The jobs reports is complete BS and do not tell the whole story. It certianly doesn't take ito account the lady who was making 6 figures but now works as a waitress at Cracker Barrel or the Super who used to make a grea tlviing building houses that is now is mowing yards and landscaping. They exist and I know them. They also don't get bailed out by Joe Biden.

The tech industry is struggling. Meta alone has laid off over 20,000 people since November. Twitter another 10,000. There is a huge reason the Tech bank failed as everyone is pulling out their money to survive.  

The home market has been struggling over a year. My wife now makes less than half her base pay so we are living off our retirement.  They were slow in 2008 but she never lost her job as a mortgage underwriter. She was one of almost 1,200 underwriters laid off from her company. They kept 14 who were supervisors that were reclassified. She knows of banks that completely shut down their mortgage division until things change.

Everyone involved with housing is sufffering whether it be realtors, developers, construction companies and building suppliers. Many of the builders around here have gone to renting out their houses rather than trying to sell their inventory.

Just those two industries alone account for a chit ton of un or underemployed people.

I don;t think that's an issue or at leasy not a big issue. I think million of people are making money online so they are no longer in the work force. It's absolutley astonishing how many people are making high 6 figures showing their ass, feet or making tik toks.

LOL ... You guuys may have known but I recently learned that OF has killed the stripper market. Many clubs are closing because they can't get anyone to work. Who would want to do it in person when you can do it for millions online? The NET is definitley affecting the work force. 

I have no data on this, CF, but I would be surprised if what you're saying about 6 figure people now working at Cracker Barrel were true.  It's just anecdotal, but it seems the opposite to me.  Those are specifically the types of jobs that are hard to fill.  When I go to restaurants or pick up a pizza, those low paying jobs are exactly the ones that are understaffed.  The regular office jobs are still there, but they've moved to be less traditional in nature or allow time for side hustles or whatever.


[quote author=CF DolFan link=topic=27890.msg396280#msg396280 date=1678822471
LOL ... You guuys may have known but I recently learned that OF has killed the stripper market. Many clubs are closing because they can't get anyone to work. Who would want to do it in person when you can do it for millions online? The NET is definitley affecting the work force. 
[/quote]

I hadn't thought about this, but it makes total sense.  Why work in a club with danger, drunk dudes touching on you, someone taking half the money, etc.  ...when you can probably do as well at home on your own.  I literally hadn't considered that but it makes sense.  There's probably a good chance you can corner the market on some fetish and be one of the only ones putting legos in your vagina or whatever it is.

Well, if someone can't afford living where they live, they usually find somewhere cheaper. It's nothing new. Look at NY or Cali among many others. I mean those places have been exorbitant for decades and when people can't afford it anymore they move.

And if the market crashes, you're not really losing anything. I inherited this house a couple years ago and it was worth about $165K. A few months ago it peaked at about $255K. Now it's back down to $230ish. The thing is that without all those companies buying up all the properties the market wouldn't have exploded the way it did. The companies buying all the properties actually increased the value of your house. If the market crashes you're just getting back to a realistic baseline of it's realistic worth. If you're worried about the value of your house you should have sold at the high.

I promise it is true. For instance, mortgage underwriters are the ones who sign off on your loan and give you money for your house. A lot of the times they are held accountable if you default and they missed something in the loan package. Companies were created to find fault with bad loans after the 2008 crash. Anyway, with a lot of responsibility and great track record comes great pay. When litterally thousands of underwriters lose their job there isn't another industry who will pay them the same or anything similar. We know more than one who is waitressing until something comes along. This also goes for realtors, carpenters, electricians, concrete guys etc. It's really hard to make anything similar in a different line of work and much worse when you have years of experince built in.

I moved from FL to CT (partially  for quality of life improvements) but also mostly for cost of living reasons.
My mortgage now is less than rent would have been in a much smaller house in florida.

In the overall scheme of things, i kinda agree with pondwater. This is how capitalism works. Companies will buy out all the properties if they see a profit to be had and that will drive the market up. And if it crashes, then they're set to take the hit.

The one thing that is unacceptable, is that when the market crashes, that the government bails out these companies or the banks that back them. Don't drive up the market for profits and then when you're in trouble expect taxpayers to bail you out.

Yes, the free market should decide the fate of a company. Just like it should have back in '08 when banks, GM, and Dodge got bailouts.

They should, but we would all pay that price.

The banks -- bailing them out was the right call.  (It was GW Bush administration who did it).  But I think it was good.  It ultimately kept the economy from going into a downward spiral where we were all way worse off.  The issue that I had was that there weren't really consequences.  The bailout should've socialized some of that and it needed to be tied to regulations so they couldn't just do the same shit again.

The GM bailout was just a smart business move.  The government made that money back so it saved an industry and didn't even cost us anything.


Capitalism is heartless, which is good and bad.  The free market is great and all, but rich people can pump their profits, the entity fails and regular people lose jobs and investors lose out, but the super rich people have pulled their assets and filed bankruptcy.  It's the cycle.  You have to intervene to prevent that sometimes.

Printing money that adds to the debt AND further debases the currency is a losing move. There should be zero leniency on private companies that are too stupid and/or greedy to properly run their company. If the economy collapses, so be it. If a few thousand people lose their jobs, so be it.

Bailouts are like giving drugs to drug addicts, it doesn't really accomplish anything except not holding people accountable for their actions. Firing up the printing presses and kicking the can down the road isn't a plan. Most reporting puts the national debt at $30+ trillion. That's disingenuious at best. Total unfunded liabilities are closer to $125+ trillion. I can assure you that when our debt finally becomes unsustainable, it will be multiple times worse than a few banks and car companies collapsing.

Anyhow, we'll just have to disagree.

The only reason anyone should care about debasing the currency is because of the effect on the economy.  So there's no point in detonating the economy to avoid "debasing the currency."

This concept will become increasingly relevant as we approach the hard debt ceiling.  There will be people who will insist that increasing the debt ceiling (to pay for spending already legally authorized by Congress) will eventually devalue the dollar, while ignoring that defaulting on our debt will IMMEDIATELY destroy the value of the dollar.

Debasing the currency is a greater threat to the economy than a few companies going belly up. Go through the uncomfort of rehab and withdrawal now or die of an overdose down the road.

I think the debt ceiling is inherently unconstitutional according to the 14th amendment. Just cause some partisan hacks don't want to pay bills doesn't invalidate the constitution of the united states.

That's not the outcome you suggested:


The economy collapsing is a worse outcome than whatever devaluation of the currency you believe may accompany a bailout of "a few companies."

Ok, if you say so. I'm sure someone else will go around in circles with you.

"If the economy collapses, so be it" doesn't really sound like a statement that requires a whole lot of unpacking.

But sure, if you want chalk criticism of that very straightforward statement up as "going around in circles," be my guest.

My only issue is the type of bank it was. Apparently most banks have something like 90 percent of customers who have less than $250,000 in them.  This is why the FDIC insures up to that amount. It's also why most of our neighborhood banks are in no danger of failing. This bank was the opposite and has almost 90 percent of their customers having over $250,000 with many big Democrat donors. In fact the bank itself donated 75 million to BLM among many other things. The fact it passed out bonuses in the week prior to failing is the tip of the iceberg.  This bank bail out really looks like a Democrat donor bailout and is why many of the Democrats are giving back their donations.  

It was only a matter of time before this thread got crazy.

That's the way our economy is supposed to work though. But if you artificially prop the system up you're increasing long term instability in the economy, inflation, interest rates, and most of all the national debt.

If you let it correct itself, it will usually balance itself out. That's not to say that there aren't going to be some unpleasant things that come along when that happens. No system is going to be perfect. But it's much better to have a few bumps in the road than it is to take a different path and eventually go off a cliff.

There are certain people with black and white thinking patterns, they assume or imply that all economies collapse at the same severity. Which is as absurd as saying that all gunshot wounds are the same. In reality, that's not how it works, it's on a spectrum. They are all different. And as noted, if the economy naturally resets itself there will certainly be some discomfort.

However, delaying a few low to moderate level economic collapses to avoid discomfort, while simultaneously almost insuring a catastrophic collapse down the road is a terrible plan. That type of thinking is short sighted, not to mention it's not congruent with the whole "evil big companies" agenda. The government manipulating the economy is much worse than the "big evil companies" manipulating the free market. The latter will correct itself over time, but the former is permanent damage that will never be corrected.

No, that's the way our economy used to work prior to the regulatory reforms put in place after the Great Depression.  We then went over 50 years with no major economic collapses until Reagan got into office and started unwinding regulation, which led to Black Monday in 1987.

And what would be an example of a low to moderate level economic "collapse"?
The Great Recession as opposed to the Great Depression?

Despite what the bootstraps-type people might claim, allowing a "low to moderate level economic collapse" to take place instead of intervening to stop it does not make things better; it makes them worse by economically undermining organizations that would otherwise be healthy.  An economic collapse is not like eating vegetables or taking bitter medicine.  There is no upside.  We should not let people with a fetish for punishing the unworthy try to steer the economy.

I stand corrected. Accordinng to CNN Business 94% of their customer were over the $250,000 insured.

https://www.cnn.com/2023/03/16/investing/first-republic-bank/index.html
 Silicon Valley Bank had one of the highest rates of uninsured deposits
SVB's percentage of both uninsured deposits and deposits that were loaned out is much higher than it is for other top banks. The latter made it more difficult for the bank to get access to cash when customers started pulling out their money.Split bar chart that shows the percentages of Silicon Valley Bank's uninsured deposits and deposits that were loaned out are much higher than they are for other top banks.

Bank of New York Mellon 97% Uninsured Deposits & 31% Deposits that are loans or held-to-maturity securities
Silicon Valley Bank - 94% Uninsured Deposits & 94%  Deposits that are loans or held-to-maturity securities
State Street Bank and Trust Co.- 91% Uninsured Deposits & 40% Deposits that are loans or held-to-maturity securities
Signature Bank - 90% Uninsured Deposits & 93% Deposits that are loans or held-to-maturity securities
Northern Trust Co. 83% Uninsured Deposits  & 55% Deposits that are loans or held-to-maturity securities

What I don't understand is why anyone would hold more than $250K in a single bank since anything over that isn't insured.

That seems as stupid as the Government printing endless supply of money to freely hand out to other countries, bailout crooks and substandard businesses, fund other countries wars that have nothing to do with us, attempt to pay off loans that legal adults agreed to paid off, etc, etc, etc.

Seems like stupidity doesn't discriminate when it comes to money and finance

From what I understand, it was mostly companies payroll and stuff like that.

To build off this point ... I saw a Pew study over the weekend that said over 7 million men under 32 live at home with their parents and are not either working nor seeking employmet. That's freaking huge. Why it was just on men I don't know but that alarming. I think my generation has coddled their children way too much.

LMFAO, a report a couple weeks ago said that only 35% of unmarried males said they were in a relationship. But 65% of unmarried females reported as being in a relationship. Yeah, that math doesn't add up. The majority of people born after GenX are fucked in the head. The parenting has definitely gotten worse over time.