Who has the MONEY?

[benco57]

With the Auto makers, Banks, Investment firms, all needing bail-outs and home and property values dropping and jobs being lost and even oil prices dropping, who is profiting? Who has the money? It's still here, it doesn't go away, it still exist but who is getting rich? Are we loosing so much cash because Americans are buying so much imported products? Or are there big "Fat Cat Billionaires" getting super rich and just piling it away? What's happening to all the cash and how can I get some?

I know this question might sound a little moronic but I am really curious as to who really prospers in a down economy. Have all the CEOs just raped the companies that employ them to the point that these guys have killed the economy, are the wealthy just not spending? I thought I had a moderate understanding of economics but I am not really hearing explanations that make much sense to me.

Ben- the once prosperous

[Mike Lewis]

Originally Posted by benco57

With the Auto makers, Banks, Investment firms, all needing bail-outs and home and property values dropping and jobs being lost and even oil prices dropping, who is profiting? Who has the money? It's still here, it doesn't go away, it still exist but who is getting rich? Are we loosing so much cash because Americans are buying so much imported products? Or are there big "Fat Cat Billionaires" getting super rich and just piling it away? What's happening to all the cash and how can I get some?

I know this question might sound a little moronic but I am really curious as to who really prospers in a down economy. Have all the CEOs just raped the companies that employ them to the point that these guys have killed the economy, are the wealthy just not spending? I thought I had a moderate understanding of economics but I am not really hearing explanations that make much sense to me.

Ben- the once prosperous

I don't know. I've stopped buying anything that is unnecessary. Let the economy fail. Perhaps our politicians will learn something about the people they are SUPPOSED to represent, and will stop loading pork in their projects and wasting our money.

[Believer45]

All I know is it isn't me.

[HighwayPrisoner]

It sure is not me, somewhere between broke, and bankrupt. The wealthy, usually make a killing during a down economy. There are bargains all over the place, if you have the money.It is that thing, of buy cheap, hold on to it for awhile, and sell at a good profit. The bottom line, the rich get richer.

[FleetMan]

Do some more thorough investigation of the hedge fund operators and investors who bet against the United States and made $$$Billions. You will find George Soros and many of the Wall Street hedge fund managers in that list, the same people who brought down the British Pound in the '90's. These actions may have been done for political reasons, however this is not a political assertion, it is fact.

[AK_Gandy]

There are still a lot of people who have money that are looking for investments (venture capitalists/hedge funds/angel investors).

Obviously some of them have been burnt lately but, a lot of them them are sitting on the sidelines biding their time. The smart ones have either decided to put their money in the safest thing they can think of.....US Treasury notes/bills/bonds....or....are buying stocks of companies that they think will come out OK on the other end.

[AK_Gandy]

Originally Posted by FleetMan

Do some more thorough investigation of the hedge fund operators and investors who bet against the United States and made $$$Billions. You will find George Soros and many of the Wall Street hedge fund managers in that list, the same people who brought down the British Pound in the '90's. These actions may have been done for political reasons, however this is not a political assertion, it is fact.

Could you please elaborate?

Links?

Articles?

Proof?

[350 long rod]

Originally Posted by benco57

With the Auto makers, Banks, Investment firms, all needing bail-outs and home and property values dropping and jobs being lost and even oil prices dropping, who is profiting? Who has the money? It's still here, it doesn't go away, it still exist but who is getting rich? Are we loosing so much cash because Americans are buying so much imported products? Or are there big "Fat Cat Billionaires" getting super rich and just piling it away? What's happening to all the cash and how can I get some?

I know this question might sound a little moronic but I am really curious as to who really prospers in a down economy. Have all the CEOs just raped the companies that employ them to the point that these guys have killed the economy, are the wealthy just not spending? I thought I had a moderate understanding of economics but I am not really hearing explanations that make much sense to me.

Ben- the once prosperous

The money was all on paper nothing real was ever made, prices just went up so if you sold after the price went up yes you made money . The last person holding the paper lost there money because all they had was a piece of paper. We have become a service economy we make very little anymore .I sure glad we did not privatize Social security Wall street would have had a field day with all that money.And when it all went away they could say thats the way the market is.

[benco57]

Originally Posted by FleetMan

Do some more thorough investigation of the hedge fund operators and investors who bet against the United States and made $$$Billions. You will find George Soros and many of the Wall Street hedge fund managers in that list, the same people who brought down the British Pound in the '90's. These actions may have been done for political reasons, however this is not a political assertion, it is fact.

That is what I am wondering, can enough of the "in the know super rich" bring down our economy short selling? Does it take thousands of people or hundreds of just a few dozen to destroy the economy? How much money does one person need? I am all for capitalism but how much of a greedy bastard do you have to be to rape the economy and put thousands of people out of work so you can acquire more money than you can spend in ten life times?

For a little comic relief check out this video about who created the Sub prime lending fiasco by these 2 gentlemen, John Byrd and John Fortune, it is hilarious and what makes it so funny is that it is so true, it is really worth watching, check it out....FUNNY STUFF

What Created The Subprime Mess*Video


Ben- the not quite broke but badly bent

[chuckster57]

Originally Posted by Believer45

All I know is it isn't me.

of us. I saw last night on the news that 2 oil companies set new records for PROFITS in 2008............ Maybe it's them guys.......Know what I mean

[benco57]

Originally Posted by 350 long rod

The money was all on paper nothing real was ever made, prices just went up so if you sold after the price went up yes you made money . The last person holding the paper lost there money because all they had was a piece of paper. We have become a service economy we make very little anymore .I sure glad we did not privatize Social security Wall street would have had a field day with all that money.And when it all went away they could say thats the way the market is.

The profit may not have been real if it was not sold and turned into cash, but the loss of the INITIAL INVESTMENT was VERY REAL and someone has that money.

[AK_Gandy]

Originally Posted by benco57

That is what I am wondering, can enough of the "in the know super rich" bring down our economy short selling? Does it take thousands of people or hundreds of just a few dozen to destroy the economy? How much money does one person need? I am all for capitalism but how much of a greedy bastard do you have to be to rape the economy and put thousands of people out of work so you can acquire more money than you can spend in ten life times?

I'm not really sure what you're saying. I think you may believe that there is some group of 'rich people' who are to blame here when in fact the blame needs to be spread much broader. And although the financial/lending/government regulatory agencies all share in the blame, we can't forget that us ordinary Americans also shoulder a large part of the responsibility because of our greed and habit of living above our means.

We can start with the fact that our economy is the largest in the world and is based 70% on consumer spending. In the last 10 years, consumer spending has been rampant while consumer savings has been at an all time low. A big reason for this spending has been the housing market and everything it supports. What made the housing market go crazy was a combination of easy loans (sub-primes were only part of it...refinancing based on quickly rising home values were also at fault) and the packaging of suspect (sub-prime) loans to people looking for investment income. These "bad" loans were mixed in with other loans and rated much higher as a whole than they should have been.

Sooo......when people holding those "derivatives" found out that a much higher % of the loans in their bundle were no good, all of a sudden their return on investment went into the tubes. Therefore they quit buying them. If the banks have no one to sell the loans to (very few keep the loan as they want to sell it for a profit so they can use the proceeds to process more loans) the demand/price of homes goes away.

During this time people were buying house's/condo's and, due to the ever increasing price, were able to resell in a short amount of time (flipping) for a tidy profit. As long as people were buying house's, no problem. However, as soon as it was obvious that there were a LOT of bad loans out there, investors stopped buying those loans and therefore banks stopped making loans except to people with excellent credit. Each of these things started a snowball effect that has led to liquidity (lending) drying up. Then there are the people who refinanced that now have a higher mortgage that they thought rising home prices would take care of and now find themselves upside down (owing more than the home is worth).

Now that the greedy investor who was flipping homes can't resell, they default. When that happens, the person holding the loan is stuck. Because demand has now gone away, they can't sell them. Now we have a huge "cash flow" problem.

Going back to 70% of our economy being consumer based, if people can't get loans or don't have jobs/money........... they can't afford gadgets/cars/travel/houses/etc.

It's like a huge Ponzi scheme where the new people coming in and buying/refinancing homes allowed the ones who got in early to reap dividends.

[AK_Gandy]

Originally Posted by benco57

The profit may not have been real if it was not sold and turned into cash, but the loss of the INITIAL INVESTMENT was VERY REAL and someone has that money.

Not necessarily.

If I bought a stock at $100 and it is now $50.........I have lost 50% of my "initial investment" but, no one actually has my other $50.

[benco57]

Originally Posted by AK_Gandy

I'm not really sure what you're saying. I think you may believe that there is some group of 'rich people' who are to blame here when in fact the blame needs to be spread much broader. And although the financial/lending/government regulatory agencies all share in the blame, we can't forget that us ordinary Americans also shoulder a large part of the responsibility because of our greed and habit of living above our means.

We can start with the fact that our economy is the largest in the world and is based 70% on consumer spending. In the last 10 years, consumer spending has been rampant while consumer savings has been at an all time low. A big reason for this spending has been the housing market and everything it supports. What made the housing market go crazy was a combination of easy loans (sub-primes were only part of it...refinancing based on quickly rising home values were also at fault) and the packaging of suspect (sub-prime) loans to people looking for investment income. These "bad" loans were mixed in with other loans and rated much higher as a whole than they should have been.

Sooo......when people holding those "derivatives" found out that a much higher % of the loans in their bundle were no good, all of a sudden their return on investment went into the tubes. Therefore they quit buying them. If the banks have no one to sell the loans to (very few keep the loan as they want to sell it for a profit so they can use the proceeds to process more loans) the demand/price of homes goes away.

During this time people were buying house's/condo's and, due to the ever increasing price, were able to resell in a short amount of time (flipping) for a tidy profit. As long as people were buying house's, no problem. However, as soon as it was obvious that there were a LOT of bad loans out there, investors stopped buying those loans and therefore banks stopped making loans except to people with excellent credit. Each of these things started a snowball effect that has led to liquidity (lending) drying up. Then there are the people who refinanced that now have a higher mortgage that they thought rising home prices would take care of and now find themselves upside down (owing more than the home is worth).

Now that the greedy investor who was flipping homes can't resell, they default. When that happens, the person holding the loan is stuck. Because demand has now gone away, they can't sell them. Now we have a huge "cash flow" problem.

Going back to 70% of our economy being consumer based, if people can't get loans or don't have jobs/money........... they can't afford gadgets/cars/travel/houses/etc.

It's like a huge Ponzi scheme where the new people coming in and buying/refinancing homes allowed the ones who got in early to reap dividends.

You are right it is like a huge ponzi scheme and in a ponzi scheme some ends up with all the money. I know it is not as simple as a few rich people sitting in an office somewhere with all the money. I just wonder in general who is profiting in a down economy? And during the "Cash flow"problem who has the cash?

[AK_Gandy]

Originally Posted by benco57

I just wonder in general who is profiting in a down economy?

There are a few pockets of industry out there that are doing OK but, if no one is buying anything.......they are the exception.

And during the "Cash flow"problem who has the cash?

The same people/groups who used to be buying those loans. It's just now they are sitting on their money........hence the liquidity problem.