Just got this email

Discussion in 'Politics' started by financedude2, Sep 29, 2008.

  1. I got this email this morning. It kind of caught me off guard.

    "I hate many spam messages as well, but I really think that you guys should read
    this, as you might have to change some of your plans if you are seniors. This is
    huge, but please take the time to read it.

    Let me explain a little bit about what the bailout plan means. It seems that the
    public is against it. It’s hard for me to come to realization that the public
    can be so ignorant.

    The bailout plan failed today.

    First, let me tell you why we got here. The reason why are economic system is
    failing is because people walked away from their homes. They bought a house for
    500k paid just 50k down, paid 20k… and when the home was worth 300k in the
    market, instead of paying 430k left, they decided to walk away. The 130k that
    were not paid, was essentially stolen. This IS the problem. People stole from
    the banks, not because they couldn’t pay (albeit there were some cases), but
    mostly because they thought it was ok to be greedy and steal. The problem
    started in main street, people stole, and THEY are not held responsible. We have
    5 million foreclosures, 60% on California and Florida. People walking away from
    their homes IS what is hurting the economy.

    Second, let me be clear what the bailout plan means. It means the government
    will buy 700 bln. Dollars of mostly securitized mortgages owned by various
    financial institutions. This means many things. It means that banks will be able
    to lend to other banks, that banks that will be able to give students their
    student loans. It means that you are going to be able to get a loan to buy a
    car, or to get a mortgage. Without this the velocity in which money exchanges
    hands will lower dramatically. Without credit and loans, businesses will not be
    able to start, house owners will not be able sell their houses, and more
    foreclosures will occur, as these foreclosures happen, your house will
    depreciate more, which means that house value will go down, which means that
    more people will walk away and they will steal MORE money. Money can not just
    vanished, if you owe 100k and you don't pay, someone losses money.

    The bailout puts a floor, buys these mortgages, and makes it able for business
    to move. Once the bailout plan goes into effect, house prices depreciation will
    stop, which means that people will actually pay their mortgages, once they see
    that their houses are not losing value, and the government (meaning tax payers)
    might actually make money from this plan once these mortgages start
    appreciating. Hank Paulson, was the CEO of Goldman Sachs, and worked there from
    1972-2006. If there is something he knows how to do is make money.

    Why am I telling you this? Because YOU will be the one who will be mostly
    affected. If the bailout plan doesn’t occur I can tell you that unemployment
    will go to at least 20% (remember that I predicted merril, aig, Wachovia,
    lehman, fannie and Freddie, and WaMu to go away at the beginning of the
    semester). Not only that, for those who will be able to get jobs, you will
    suffer at least a 25% pay cut (at least). I am telling you, you have about 100k
    at stake for the next 5 years right now.

    Political year is among us, and EVERYBODY blames Wall Street, oh how evil they
    are,… why don’t they blame congress with their first time home-owner program and
    pushing banks to loosen the requirement to get a loan. There is a lesson to be
    learned, one, people (the masses) are mostly ignorant, and two, (the masses) are
    never hold responsible, because they have the voting power, three, people are
    greedy, and at some point most people will steal. This is crap for us people,
    you might not know it yet, but not only has American masses stolen from many of
    our bedrock financial institutions, but now, they have totally screwed us by
    stealing 100k of our salary for the next 5 years and probably about a 40%
    unemployment among recent grads (for the qualified jobs), specially in the
    financial industry. Getting a masters sounds interesting. Be prepared. The
    economy will eventually recover no matter what happens, and opportunities will

    The bailout plan will be voted again, and I think that the plan will ultimately
    pass. That's why the dow jones is only down 700 points and not 2000. 75% chance
    it passes. It needs only 10 votes, and it was actually the Republicans who
    opposed to it 2-1. Everybody in the finance business that I know are livid.
    Things can get really bad my friends. REALLY FREAKIN' BAD. Depression like
    1930's bad.

    sorry to bring the bad news, I just want everybody to be prepared for how ugly
    it might get, and think about the future, whether it is by getting a masters or
    CPA, CFA... etc...

    yours truly,

    Angelo Martorell"

    Awful grammar aside, what do guys think?
  2. being a trader, do you consider yourself a thief??? since you buy stocks and (presumably) sell them at a profit and pocket the difference, but do not sit long term in the investment?

    oh wait youre not a trader, youre a spammer... so all you do is steal time and bandwidth...
  3. Bolts


    What??? "Main street" means sunshine, parades, ice cream parlors, and evening walks with your high school sweetheart, not selfishness and neglecting financial obligations!

    But seriously, that email makes an excellent point. If you want people to listen to you, you just tell them what they want to hear. Never tell them the cold, hard truth. Just remember, every time a politician utters the words "Main street", he is pandering.
  4. Ummm, no.

    People bought these homes with variable rate mortgages. When rates went up, they lost their ass.

    It's not that they were able to afford it and didn't want to pay. They couldn't afford it, and therefore couldn't pay.

    If Joe Sixpack was able to afford his $800k house with his $60k/year salary, I'm sure he would have held onto it. Human nature tells us to hold onto the loss anyway. Even if the house were to depreciate in value, I don't believe that would motivate him to sell.

    So, I think you're wrong here.
  5. TGregg



    Moved to P&R.

    And now that I've moved it, let me be clear. Anybody that says they know how much this will cost is a liar, and I mean that in the strongest sense. If they say it will cost x, then they are saying they have no idea what is going on.
  6. Let me be clear, I did not write this email, I just received it. I found it refreshing, meaning that Angelo's grasp of finance is frail and he'll be bumping up the curve.

    I've gone over it a few times and the e-mail is so poorly written that I'm left unsure if he is a fiscal conservative or a liberal conservative. I'm just struck at what a myopic view it takes of the issues, the errors of his statement, and no evidence or explanation to back up anything he said.

    My spouse and I actually lost close to 300k in networth in the last 3 months (mostly in unexercised stock option from compensation), so it's hard to stomach a condescending e-mail lecturing me on the consequences of the bailout.