Stock Market Gains From Past Three Years Wiped Out

seriously? al qaeda?

maybe you don't understand how the markets work, or the definition of the word leverage. unless al qaeda has been infiltrating wall street for the last 25 years your scenario is preposterous.

these banks and investment and lending institutions were taking money they had, borrowing between 3 & 30 times that same amount to make investments. they would pay back the loans & keep the profits. lots of these investments were in mortgage-backed securities. mortgages were being written to get anyone who attempted to buy a house into a house. these mortgages were written in such a way that people could make their payments for a year or two or three. after that the terms change and the amount of the payments skyrocketed in many cases. also, when the bankruptcy bill was rewritten there was no protection for people who file bankruptcy due to medical reasons. medical reasons were previously the #1 reason for mortgage defaults. with the rising costs of health care and the swelling numbers of people who are uninsured or under-insured, coupled with these bogus mortgages has caused record-breaking foreclosures. these defaulting loans are mixed into huge packages of thousands and tens of thousands of mortgages so now there is a situation where the holders of these mortgage-backed securities don't have any idea what their investments are worth.

institutional and individual investors get worried and decide that they want to pull their money out so that they don't lose their profits from the past several years. so many investors did this that cash started running out and when attempts were made to cash in on the paper wealth it came to light that money wasn't actually there.

so basically it hsa been a grand illusion of wealth.

now truly there are people that made huge earnings in this whole situation. the ones who kept it are the ones who got out early. any real money that was made was either pulled out or now sits frozen. for everyone else they are sitting around scratching their asses and wondering where their money went.

most of the value that was added to the stock market in the past few years was artificial and now it is being corrected. problem is that now that wealth is gone, costs are not going to fall in unison. there will be greater demand for basics and less demand for luxury in this next year or two.

al qaeda's role is different. bin laden announced his war with us in 1996. He stated that his aim was to attack America and cause us to fight an unwinnable war and drain our treasury. bush & co fell into that trap. we are dumping over 10 BILLION dollars a month into Iraq and Afghanistan of money we don't even have. In an attempt to assuage Americans fears, and distract the citizens from what is going on over there Bush overcompensated by turbo-charging our consumption based economy. That was all done on credit. So we've thrown away hundreds of billions of dollars, our country is falling apart, and bin ladens bones are laughing away in a cave somewhere

Drew of NY @ Oct 19, 2008 20:25:04 PM