at least, insofar as i almost barely understand some of what's going on
anyways, friday i had coffee with the cute boy from my german class, under the fairly legitimate pretense of wanting to hear about the recent financial crisis. we had a very nice time, i learned a good amount and i remember some of it. its confusing.
apparently, banks have been giving out bad mortgages or mortgages that are out of people's ability to pay off. i think they were doing this because they made nice commissions every time they sold a house, and because they thought the housing market was super fantastic and reliable. then, lots of these mortgages/loans were assumed by big investment companies (like fannie and freddie and the rest of the people who aren't doing well). these investment companies have less federal restrictions on them than banks do, so they were able to trade different loan packages/securities/money things with each other, essentially betting on what different arrangements would have the biggest payoff. but, when people began to default on their mortgages (not be able to pay them), and the banks sold the houses at extra low prices in order to make some money back (foreclosures?), all of the sudden the things the big investment companies had been gambling with weren't worth any money anymore. so the big companies, which employ huge teams of expensive researchers that analyze various market/housing/economic trends, ended up not really having the money they'd been counting on.
so, pretty much everyone (economists) is saying the federal government needs to step in. colin says this is because no one else does what these companies do and it will leave a huge hole in the system if they go under. greg points out that maybe this trading doesn't need to be happening. i am unclear. but anyways, the "bailout" means the government would buy the companies at lower prices and hold on to them until things clear up/are fixed and they hopefully get a return on their investment. that way nothing collapses in the meantime.
a thing that is worrying me- if we pass a 700 billion dollar bailout thing, which everyone has told me is the right thing to do and i dont know enough about to disagree, which parts of obama's plan are going to evaporate due to lack of funds? is that correct, to assume that the bailout money will affect how much money is available for other things? are we losing money for students, general tax cuts or the health care plan first?
hopefully joe can fill in some of my blanks and answer some of these questions after his date with the math professor
hopefully everyone else is going on really freaking educational pseudo dates too
5 comments:
I'm not going on educational pseudo dates, and am so jealous that you are. Also, everything you said sounds pretty much like what Mr. Johnson has told us, so I think you're doing well on that part. And, to answer your question, of course things from both of the candidates' budgets are going to have to be cut because we simply cannot afford to do them. However, the media and debate moderators have had a hard time getting either candidate to give a straight answer as to specifically what will be cut first. I'm looking forward to Joe's upcoming information as well.
i could fill you in right now on a decent amount, but i'd rather talk to you over a phone where my words can be fluid instead of static on a page.
i'd be happy to talk with you about it as well anna
oh my god i'm going on one of those dates with my math teacher on tuesday!
anna- ask boys out! its a better rush than drugs or shoplifting! i'm 100% serious, so dont tell daniel about this
joe- i just wanted to say you're awesome. i'm excited for your date too.
we should just call everything dates. then there would be so many
Post a Comment