The State of the Economy and Bailouts





This is a spirited debate on the economy and bailouts, (and how they should be handled) among anyone who chooses to participate. Also included is the email conversations and a graph that our dear northern friend has supplied.

First up----original opinion and graph: (you can left click on the graph to enlarge)

Names with-held (and others…)

"This bear market is only second to the 1929 crash and seems to be far from over… "

"I thought this interesting (chart on the top right)… a comparison of percentage drops in the market from 3-earlier bear markets along with today’s markets. Showing percentage drop of each from start of each drop out 810 days… It has dropped percentage wise 51.9% so far this time which only beat by the crash of 1929… the other two recovered where the 1929 continued all the way to 89.2%… …and much faster than the previous drops if you exclude the 1929 drop…Interesting times to say the least!" (from the northern guy)

The "southern guy" responded:

"Don't believe this....First, it's comparing apples and oranges....second, the 29 crash was actually a 3 year phenomenon...it went down about 25% in the first two days in 29, but by 32, it was down 90%; as bad off as the Dow is, it's still got a ways to go to hit that number....and for a different, not so pessimistic view, check this out....

Then, the "northern guy" responded:

Rovin and Southern Guy.

Not clear on your thoughts … apples and oranges??? Note in my defense: My opening line should be taken at face value, no more… “I thought this interesting (chart below)…” The 51.9% fall so far was what caught my eye as I think it is not near the bottom by any means… The whole world has its nipple in the ringer yet it appears by the dollars action over the last 6-months we are still considered a safe haven, we live in interesting times …

I read the article you sent and the only issue that stood out to me was the auto deal. I have been waiting to see how congress is going to respond concerning the auto bailout monies asked for, as this may indicate how they would deal with what yet is ahead of us.

From my understanding, not sure if I have gotten the true figures from that which I have read, but if so the US (Detroit) car cost approximately $2,000 dollars extra “EACH” due to contracts the laborers and their unions have secured for them over the years (great wages, great health benefits, great retirement, maybe to great). If this number is true and is not addressed as part of any bailout plan the money in any amount is not going to help, money down the rat hole from my perspective. I would guess/bet they will not deal with this (don’t want to offend the unions as there will be another round of voting in 4-years), time will tell. If not I vote for letting them fail.

From my understanding there are 85,000 auto workers in the south making autos so efficiently that they can ship them to Europe and still make a profit… once the Detroit automakers fail some of these workers who supported and loved their union to the point of self destruction may have to take their training and move south to get a new job with companies that are still competitive… For us this means more cheap houses on the market in the most dangerous city in America, anyone ready to move?

Just my two-cents worth…

The Northern Guy…

(these responses are unedited for spelling and content----I will amend all content on request)

Rovin

addendum: My post just below this one is my response to the auto industry bailout--Rov