ALERT: Money Market Accounts Frozen
09-17-2008, 01:56 PM
#61
Geez, I had to work today and look what happened to my thread! In all honestly, some banks and other financial institutions will probably go out of bizness, but as long as you have FDIC coverage then you'll be fine. FED will either sell more debt or print foking money and, yes, Congress will approve it.
Look at it this way: assets have value, homes have value, gold has value, oil, AIG debt, BAC preferred stock, etc. etc. etc. What the market is upset about is how much is it worth?
AIG caused so much turmoil because they insure debt. For example, say you walk away from your $300k mortgage and now your house is only worth $200k. The bank puts you in foreclosure, sells the house, grabs the $200k and goes to AIG for the other $100k. Now what happens? AIG doesn't have enough cash to cover these debts so they have to declare bankruptcy for protection.
Now, the FED stepped in and provided some cash to keep them going WHILE they sell their good assets (which are worth a lot of money, well, slightly less, because we know they are hurting for cash.)
...to be continued...
09-17-2008, 02:03 PM
#63
....continued from above....
If AIG goes under, or even gives the appearance of going bankrupt, now the bank is holding your shitty ass mortgage (u deadbeat) and everyone else's mortgage WITHOUT insurance protection... Guess what? Those assets are worth much less now when they try to sell them to someone else, and maybe, no one else will buy them. Now the vicious cycle begins... the bank has to WRITE DOWN those assets; value is less now. So, how much is their stock worth? Less, but how much less? Look at C or BAC. Stock is plunging because the market is struggling to value those companies.
Messy huh?
Well, that's my crappy analysis of the situation. We need carrera4 in here to add commentary. He's been MIA.
If AIG goes under, or even gives the appearance of going bankrupt, now the bank is holding your shitty ass mortgage (u deadbeat) and everyone else's mortgage WITHOUT insurance protection... Guess what? Those assets are worth much less now when they try to sell them to someone else, and maybe, no one else will buy them. Now the vicious cycle begins... the bank has to WRITE DOWN those assets; value is less now. So, how much is their stock worth? Less, but how much less? Look at C or BAC. Stock is plunging because the market is struggling to value those companies.
Messy huh?
Well, that's my crappy analysis of the situation. We need carrera4 in here to add commentary. He's been MIA.
09-17-2008, 02:07 PM
#65
Originally Posted by thetz99,Sep 17 2008, 02:04 PM
Bert, they put a hold on withdrawals because there was a 50 billion two day redemption run on there assets...that's panic baby 
09-17-2008, 02:13 PM
#67
Registered User
well, to offer a direct solution to the topic...
all my 401K funds were moved to the cash fund 6 months ago.
probably wait another 6-10 months and i'll move it from cash to funds again.
all my 401K funds were moved to the cash fund 6 months ago.
probably wait another 6-10 months and i'll move it from cash to funds again.
09-17-2008, 02:14 PM
#68
Registered User
Originally Posted by 05TurboS2k,Sep 17 2008, 03:11 PM
So I'm confused, does this mean the Economy is bad right now?
09-17-2008, 02:14 PM
#69
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Originally Posted by Bert05GPW,Sep 17 2008, 02:03 PM
....continued from above....
If AIG goes under, or even gives the appearance of going bankrupt, now the bank is holding your shitty ass mortgage (u deadbeat) and everyone else's mortgage WITHOUT insurance protection... Guess what? Those assets are worth much less now when they try to sell them to someone else, and maybe, no one else will buy them. Now the vicious cycle begins... the bank has to WRITE DOWN those assets; value is less now. So, how much is their stock worth? Less, but how much less? Look at C or BAC. Stock is plunging because the market is struggling to value those companies.
Messy huh?
Well, that's my crappy analysis of the situation. We need carrera4 in here to add commentary. He's been MIA.
If AIG goes under, or even gives the appearance of going bankrupt, now the bank is holding your shitty ass mortgage (u deadbeat) and everyone else's mortgage WITHOUT insurance protection... Guess what? Those assets are worth much less now when they try to sell them to someone else, and maybe, no one else will buy them. Now the vicious cycle begins... the bank has to WRITE DOWN those assets; value is less now. So, how much is their stock worth? Less, but how much less? Look at C or BAC. Stock is plunging because the market is struggling to value those companies.
Messy huh?
Well, that's my crappy analysis of the situation. We need carrera4 in here to add commentary. He's been MIA.
Valuation is the name of game.None of this will cease until the housing correction is finally over. I know that there are plenty of people still going into foreclosure. Whether small or jumbo, we have clients at all ends of the spectrum willing to let their homes go because they are no longer willing to pay for a depreciating asset.
That means that even after these bailouts by the government, if the housing correction isn't over, expect more turmoil.
09-17-2008, 02:15 PM
#70
Registered User
Originally Posted by jyeung528,Sep 17 2008, 03:13 PM
well, to offer a direct solution to the topic...
all my 401K funds were moved to the cash fund 6 months ago.
probably wait another 6-10 months and i'll move it from cash to funds again.
all my 401K funds were moved to the cash fund 6 months ago.
probably wait another 6-10 months and i'll move it from cash to funds again.