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We all saw the drop yesterday in the stock market which I think is 100% silly. The WORST thing you can do right now is worry and take your money out of the market. The reason the market tanked is that the $700,000,000,000 bailout deal went belly up.
Many are clueless what this bailout deal actually is so here is a way to look at it that made sense on TV last night.
Let's say we are in good times and a bank has $100 to loan. It loans it to a farmer who buys a tractor. The Tractor maker pays bills and puts the rest back in the bank and the banker loans the $100 to someone else who buys stuff and pays for stuff and pays his loans and that banker loans the $100 to somebody else you buys more things. That $100 bounces and bounces and people get paid and buy things over and over with that one $100 bill.
But in the last few years that banker has made a bunch of bad home loans and is not getting his $100 back. All of a sudden he is worried about loaning the $100 and does it less often. Now when three farmers want $100 only one of them gets it. The other two can no longer by that new tractor and because of that the tractor maker lays off people. The same people that were buying lawn mowers. Now the lawn mower people are not selling as many and stop buying blades from the blade maker.
See the problem?
What the government wants to do is to get those pesky bankers to start lending money again. They want to buy all the BAD loans the bankers are stuck with to take the burden away and make bankers happy.
Now when I say bankers I'm not talking the local banks but the BIG banks that loan the small local banks money.
So the next time you see a local banker - give him a hug and make him feel better. A happy banker will loan money and get the economy going.
At least that is my simple take on it.
I do have a question. I have about 60% of my assets in bonds. If there are no loans going out I would think bonds would go up in price. Are interest rates going to go lower to spur the economy thus pumping bonds? Or are bonds a safe haven and supply and demand is bumping their price. All I know is I only lost 2% yesterday and 4% this month.
I see we are having a "Dead Cat" bounce in the market today. Obviously I have never tried to bounce a dead cat as it is bouncing rather well.
It seems McCain is blaming Obama because the Republicans balked at voting for it?
WHAT??? Did I miss something? Seriously, I try to stay out of this stuff but I honestly think McCain is losing it a tad.
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I have six Amazing Race contest entries - mail your 1st to last predictions to
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I bottled another beer last night - this one is is an American Amber - sort of a Fat Tire clone. I'm also getting labels ready for the below. tasted pretty dar good and I can't wait for it to get carbonated. Drank a half bottle of green (new) beer last night and loved it.
Friday I'll be bringing some Columbus Carriage Classic Ale to The Kurth. The sad thing about this beer is I'm running low already, pretty tasty. I'm looking into larger distribution vehicles for beer (instead if 48 FREAKING bottles each batch). I'm looking into Party Pig's which hold 2.5 gallons.
DJ mentioned a brewery room for the basement for next years basement adventure. COOL! I love that woman.
MAN - where did the time go. I have to put out a fire.
Rod
Many are clueless what this bailout deal actually is so here is a way to look at it that made sense on TV last night.
Let's say we are in good times and a bank has $100 to loan. It loans it to a farmer who buys a tractor. The Tractor maker pays bills and puts the rest back in the bank and the banker loans the $100 to someone else who buys stuff and pays for stuff and pays his loans and that banker loans the $100 to somebody else you buys more things. That $100 bounces and bounces and people get paid and buy things over and over with that one $100 bill.
But in the last few years that banker has made a bunch of bad home loans and is not getting his $100 back. All of a sudden he is worried about loaning the $100 and does it less often. Now when three farmers want $100 only one of them gets it. The other two can no longer by that new tractor and because of that the tractor maker lays off people. The same people that were buying lawn mowers. Now the lawn mower people are not selling as many and stop buying blades from the blade maker.
See the problem?
What the government wants to do is to get those pesky bankers to start lending money again. They want to buy all the BAD loans the bankers are stuck with to take the burden away and make bankers happy.
Now when I say bankers I'm not talking the local banks but the BIG banks that loan the small local banks money.
So the next time you see a local banker - give him a hug and make him feel better. A happy banker will loan money and get the economy going.
At least that is my simple take on it.
I do have a question. I have about 60% of my assets in bonds. If there are no loans going out I would think bonds would go up in price. Are interest rates going to go lower to spur the economy thus pumping bonds? Or are bonds a safe haven and supply and demand is bumping their price. All I know is I only lost 2% yesterday and 4% this month.
I see we are having a "Dead Cat" bounce in the market today. Obviously I have never tried to bounce a dead cat as it is bouncing rather well.
It seems McCain is blaming Obama because the Republicans balked at voting for it?
WHAT??? Did I miss something? Seriously, I try to stay out of this stuff but I honestly think McCain is losing it a tad.
==============================
I have six Amazing Race contest entries - mail your 1st to last predictions to
===============================
I bottled another beer last night - this one is is an American Amber - sort of a Fat Tire clone. I'm also getting labels ready for the below. tasted pretty dar good and I can't wait for it to get carbonated. Drank a half bottle of green (new) beer last night and loved it.
Friday I'll be bringing some Columbus Carriage Classic Ale to The Kurth. The sad thing about this beer is I'm running low already, pretty tasty. I'm looking into larger distribution vehicles for beer (instead if 48 FREAKING bottles each batch). I'm looking into Party Pig's which hold 2.5 gallons.
DJ mentioned a brewery room for the basement for next years basement adventure. COOL! I love that woman.
MAN - where did the time go. I have to put out a fire.
Rod