The meltdown continues

   It just keeps getting worse.

   Even after emergency measures by the Federal Reserve and the Treasury Department, stocks continued to tumble.

   The Dow fell nearly 700 points … a loss of about 7 percent.

   "The story is getting to be like that movie Groundhog Day," Arthur Hogan, chief market analyst at Jefferies & Co. told the Associated Press today.

   "Everything we're seeing is historic," he added. "The problem is historic, the solutions are historic, and unfortunately, the sell-off is historic. It's not the kind of history you want to be making."

   As the markets continue to plunge, the people feeling it the hardest are those about to retire and who have just retired.

   Earlier this week, the House Education and Labor Committee heard from experts about the impact of the financial turmoil on retirement accounts.

   Jack VanDerhei of the Employee Benefit Research Institute told members of Congress that older employees "have more to lose in a significant downturn."

   He continued: "Research  has shown that a worker's age is a major factor in his or her ability to ecover from an economic downturn."

   I'm working on a story about how all of this is affecting real people here in Western New York.

   If you are someone who is nearing retirement or has recently retired and you're willing to be interviewed, please call me at 849-4418.

--Maki Becker

Comments

[Al]

Beware of governments bearing gifts!

[outragedcapitalist]

On various news programs today it was noted that Paulson wants to inject "capital" (our taxes) into the banks rather than the earlier plan to buy up the toxic loans from the banks.

I don't know about the rest of you, but I am tired of being played for an idiot by the likes of Paulson, Bush, Barney Frank, Pelosi, and Chris Dodd.

It is all a shell game folks, and we are the pea. They now want to "invest" capital in the banks instead of having taxpayers buy the bad loans at a discount as originally planned.

Do they really think we are all that stupid ?

Gee, lets see, under this new "invest" in the banks plan the banks will write down the value of the bad loans to a market level and write off the remaining outstanding balance. This is punishing the banks and protecting the taxpayer ? What nonsense. You and I are injecting the capital under this new plan which then gives the lenders the money to absorb the write downs of the toxic loans.

Who wins under this new plan ? The banks as taxpayers "capital" is absorbing the losses, and the irresponsible borrowers who get to stay in the homes but with a much reduced balance on their mortgage.

Who loses (foots the bill) ?? You and me, the people who acted responsibly !!

What a Country !!

[Al]

Art Hogan is a brave man. On Friday when the DJIA went under 8000 he called it a bottom. Above, he also said the "problem is historic." That it is. The "meltdown" is going to be far wider than the "markets" because the "problem" is Money. Classic definitions of "Money" have been destroyed by artifices constructed by Wall Street and bought into by global banks and governments. "Money" now has no standards. Without standards it is blown wvwry which way with every shift in the economic winds. The entire economic system, and that includes wages and taxation will have to be reformed and reconstructed.
The current Bush-Paulson-Bernanke and Congress plan to make us buy passive ownership in banks is completely flawed. The credit markets are so huge they are a terrier shaking a rag doll that is the equity markets. And no one knows what a company is worth anymore. Even with sound accounting standard of mark to market which cause immense pain to unmarketable securities as CDS's and bad subprime loans on the books.
You don't even know what you are worth, because your 401(K), your home, your very job and wages are subject now to violent changes in short order. In ten years time "Money" as we know it will not exist. Is that a "meltdown", or what?

[wil]

McCain supports teaching Islam in our schools? Watch this!

http://www.youtube.com/watch?v=-b1qgh0JiuI

[Artklein]

I was heartened during a lot of the discussions of the Sunday Morning News Shows that the more intelligent folk are talking about the need for bipartisan approach to resolving the housing/credit crisis. obviously there is nobody in the current leadership roles who have gathered any confidence. bush and Paulson nearly blew the only hope out existence by allowing the package to be called a Wall St Bail-out. But it cannot wait until January 20 for resolve either.
Maybe both candidates and congressional leaders had better get together intellectually if not physically and weave together a scenario that can help now.
If AT&T can't get commercial paper we are in bigger trouble than anyone has let us know and we'd better get cracking.

[I Love Broken Gold]

BobbyCat - your post contained truth and logic. Revise the bankruptcy laws, consolidate local governments. In all seriousness, why hide in a blog. You should run for office.

[wil]

The people are speaking, you just don't like what the majority is saying Carl. Look at the polls, is that not democracy? So.. let's examine what you have just said... Of the last eight years, the first six were great as compared to the last two.. REALLY!! Tell everyone what was so great about 9/11, Katrina, The IRAQ War, ENRON, ADELPHIA... I could go on forever but i think everyone gets the point...Typical republican response "it's not our fault, It's the democrats" Nobody buys that malarkey for a second... Keep up the great work C... Your doing a "heck of job" for the democratic side....hahahaha

[Don H]

Relax. Obama's going to pass out money for everyone, --as long as you're poor, lower middle class, cannot pay your bills, etc. etc. etc.

[Carl]

OP Mike
I feel your words are the truth. Many say we can't have the last 8 years, the facts show the first 6 years were great, unemployment was at 5 % or below which is full employment the economy was on fire. When the DEMOCRATS took over congress the wheels began to come off,,the mortgage situation was their fault the Reps. sounded the warning only to be shouted down by the Dems. have no doubt raising business taxes ending the business tax cuts doubling capital gains taxes on everything and pushing a socialistic health care system will destroy this country. I agree with OP Mike the movers and shakers the business owners the ones who write the paychecks will pull back and I think we are seeing that now. Remember these facts 10% of top earners pay 70% of all taxes collected, the bottom 50% account for less than 3% of taxes and they take over 90% of gvt. handouts [ these are the Obama core supporters] God help us all if Nancy, Harry and Barry run our economy and I can't even imagine Obama in charge of our military. This isn't funny anymore the people have to say ENOUNGH.

[Al]

CNN just put Christopher Cox, SEC Chairman, on their Wall of Shame. Another agency appointee of the Republicans. They said he completely ignored Bear Stearns, and failed with Lehman Brothers. Cox pleads ignorance. Well he's right there, the Republican appointed deadheads, including Fed Chief Bernanke bot ignored, hid, and failed to act quickly for over the past year. As CNN continues its Wall of Shame, just see which party they represent.

[pgr88]

Obama has disappeared during this crisis - because he has nothing to say. He blames some kind of vague "deregulation" but it is clear - The Democrats aided and abetted Fannie Mae and Freddie Mac to make loans to unqualified buyers, a program which was quickly taken over by fraud. Who in their right mind wants more of the same?

[Lydia Bezou-Hojnacki]

Don H

Thank you for your insight. You are 100% correct in your thinking.

[OP Mike]

When Barack Obama's poll numbers rise the world economic situation deteriorates. People around the world are terrified of the possibility of an Obama presidency. Can anyone blame them?

Who in their right mind wants a fanatical leftist, a hard-core socialists, at the helm of the the world's greatest capitalist country?

[Don H]

Much like the housing market, the stock market was overpriced and due for a major correction. The government should stop stoking the panic fires with daily public ststements from the President.

[RKT]

What are our US Senate leadership doing these days. Wall Street is Chuck Schumer's backyard and he didn't see this coming??? I know he wasn't in Buffalo taking care of upstate issues. As for Hillary, she's been awfully quiet. I don't trust either party to look out for our interests. I am considering voting against all incumbents or going with third parties this time around. Neither political parties conventions in August/September even mentioned this was going to happen. Clueless.. and they are our leaders???

[Ron]

This development makes me realize that the world financial system has been a "house of cards" for a long time that was teetering on the brink of collapse. The sub-prime market was simply the last piece needed. Personally I wish I had the money because I would be buying solid stock like crazy. This mess will resolve itself and the strong will be even stronger. The weak will die off as they should have a long time ago.

This mess simply demonstrates that we can not allow a financial market that has no oversight or regulation beyond greed.

[Lydia Bezou-Hojnacki]

The meltdown will continue for quite a while. It's called "market correction." Those mismanaged companies will fail; the strong ones will survive. I am still in shock (ashamed) that our lawmakers saw fit to throw bad money at badly performing firms.

Consider our national debt--do we or do we not have the "reserves" to bail out anyone--even Joe Q Public--when our country OWES OTHERS $10,000,000,000,000+, the bulk of which is for loans and trade deficits BECAUSE our FEDERAL GOVERNMENT has NO MONEY--we are currently "OUT" $10,000,000,000,000+

Read it and weep.

As for myself, I am finally losing value on my investments, but countering that by buying, not selling. Over the years, practice makes one smarter. When you study your potential investments and get a good read on how the corporations fare in product design, marketing, and financial health, you can instinctively pick stocks prudently. During this meltdown, buy, buy, buy more of the sound and proven stocks. There are many.

For every shrewd investor, there is a fool who is in panic sell mode at exactly the wrong time! No, thanks, I'm not buying General Motors--General Mills, maybe, but neither Gen Motors nor Gen Electric.

KNOW your stocks before you buy, then HOLD, HOLD, HOLD!

What, me worry? about Social Security, maybe! I, a retiree, hope to live another 30 years...that would take me past 100. And life is grand!

[Mike]

Yes, yes, I know. When Chairman Obama takes over all will be right with the world. His guiding light will shine through all this capitalistic mess and bring forth a new world order. He will take from the rich and give to the poor. He will touch the sick and they will arise from their death beds. As his shadow passes over the land, flowers will bloom, pollution will end, and the Bills will win the Super Bowl. All your hopes and dreams will come true.....our new messiah has come.

[BobbyCat]

What must the world's economic markets think when it looks at the US economy being driven into the ditch by a President who Europeans - with no regard for political correctness- consider a dumbbell? 'Nervous' is what they feel, at the prospect of eight more years of failed American "leadership".

Consider the prospect of a McCain presidency - a man of 72 with a volatile temper, high blood pressure and a family history of cancer and early heart attack, with a total ignoramus in the VP slot. His platform is total victory,endless war and endless borrowing.

I'd be nervous, too.

World markets understand better than the American electorate that the USA is flat broke and can no longer afford to exert it's military influence without borrowing permission from China.

Who will fill this leadership vaccuum is unclear. The only cure for uncertainty is wise and progressive leadership. Let's hope that an Obama presidency isn't too little, too late.

I would hope that a President Obama would revise the bankruptcy laws to keep our retirees in their homes to avoid widespread homelessness.

Locally, it's time to condsolidate local governments and services to bring some relief to overtaxed property owners. All the towns should reduce the size of their boards, with or without citizen petitions.

Batten down the hatches.

[Mark]

The real problem is the meltdown seems to be universal. Managed portfolios were still buying AIG for example in May, they should have known better. GM is down to the level of the Korean War. The problem is that some of these blue chip stocks are never coming back. What does the retiree do then?

[Pete Z]

Luckily the automakers were smart to dump off the pensions to the union to take care of. The union now has to deal with their own losses.