Mr. Chief, we have a problem.

[Mathew952]

I'm not an economist, and I won't pretend to be. I just feel an important peice of news has passed you guys by, being that it didn't really make the geek headlines.
Put simply:
America lost 700 BILLION dollars yesterday.The entire stock market lost 4.4 percent of it's worth. Why? remember all of those banks that got bailed out a while back. They missed some. and one just went bankrupt. Why? Even simpler, A bank makes money by taking a chance that you, the borrower, will pay back. some people are higher risk to not pay than others. Some cocky dumbasses decided to give Tons and tons of loans to the high risk groups. They didn't pay.
After the failing of one company, it drags down others. People panic, sell their stock, more panic, more selling, until an ambitious investor decides to buy up the extra stock at a bargin price and stop the plummet.Plus, this company was a bank. And all of the other companies that borrowed money from them are now facing some issues.

But why should us gamers care about this? Most companies expand by borrowing money, and paying it back with the new profits. Especially big companies. like EA. Like Microsoft. Like apple, like sony, and many new game developers get almost all of their money from loans. I don't know what companies are being hit, but you can bet most of the big name developers are having money missing right now.

At the same time, America's dollar is getting weaker. More companies are failing. Housing is down the tubes, and a ton of other bad things that are similar to what happened during the great depression.people are panicing, pulling money out inspite of the FDIC insurance (Who wants to wait six weeks for a government check to get your money back).

Once again, a ton of big companies are being hit. Dell, HP, ATI, amd, intel, gateway, nvidia, ect.

In any case, we aren't facing iminent doom, but you might see a big slow down coming up as these companies struggle with their finances. Once again, companies are afraid of innovative titles, and want to play it safe until their "safe" money wise. Great. and we were just getting over it.

EDIT: Another issue is that the american economy has been on what was described as "an adredaline boost" for the past 8 or so years. Pretty much, we tried to expand as fast as possible, and deal with the consequences later.

Consequences: http://brillig.com/debt_clock/

 

[ElephantGuts]

Well maybe if that damn meteor would hurry up and blow up the Earth we wouldn't be having this problem right now...

 

[bluemarsman]

We are so screwed.

 

[Imitation Saccharin]

I love the American attitude on this.

Going by their past history, this election issue will be completely forgotten under the weight of should Roe V. Wade remain????

 

[EmperorDude]

Why did this have to start happening now? I want to go to university but will I be able to get a good job after I get a diploma?
Republic of South Korea, I might end up going there after all.

 

[Imitation Saccharin]

I'm just here to point out that maybe it's about time the banks toppled. A bank loans money as OP says, based on risk. They risk, but never lose, because the government will always bail them out when they fuck up.

Because if the government doesn't cover bank liquidity, people start what's call a "run on the bank". This is a cascading effect that destroys the economy as all Western banks use fractional reserve banking and are thus usually unable to cover the costs should all their lenders withdraw their money at once.
So once the banks close, the driving force of investment falters, and the whole system kind of goes "clunk".

Is what caused the great depression. Well that and dust.

If a company, essential to the nation or not, is such a colossal screw up that they can't stay in business, WHY can't we just let them fail?

Because I like eating corn for .50 cents a cob.

It's the same with banks, better actually. Borrow money from a bank, it goes SoL, you don't have anyone to repay. You're free of that debt. Now someone who invested in said bank, or had money in said bank, will lose their cash. BOO F'ing HOO! You invested and/or stored your finances in a company that was incompetent, should we care?

Where are YOU storing your finances?

Were you not paying attention to the news?

A run on the bank can take as little as a few hours. Probably seconds in the modern era what with the internet and all.

 

[bad rider]

Well maybe if that damn meteor would hurry up and blow up the Earth we wouldn't be having this problem right now...

Just keep repeatedly using the large hadron collider a few billion times, mathematically-with the law of averages-it will eventually work.


BTW www.hasthelargehadroncolliderdestroyedtheworldyet.com if you want to keep tabs on it

 

[Dogeman5]

We are so screwed.

Truer words never spoken...

 

[SilentHunter7]

I love the American attitude on this.

Going by their past history, this election issue will be completely forgotten under the weight of should Roe V. Wade remain????

Though I love my country, I find I cant disagree here. A president wins not based on whether or not he'd be the best, but whether or not he blew the most smoke and distracted the people from real issues.

-edit-
Aside, does anyone here wonder what will happen if Bank of America goes under? If everyone makes a run on the banks, We'll be in another Great Depression. The FDIC wont be able to cover all the withdrawals. Not with the Treasury is such a sad state.

 

[Limasol]

Yes banks make a profit out of loaning you money, if they didn't there would be less banks around. Personally i wouldn't take a loan out under any circumstances except for a mortgage because i don't like debt, but at the same time i can't see how we should kick these banks while they are down, we need financial support as a society, without banks we wouldn't have any secure, legal and regulated way of getting money for living etc.

Fact is, the Fed is alright, they just look bad to us, probably because we don't know jack about their workings other than to store our money and charge us interest on loans and because we hate authority subconsciously.

Also it our, the buying public's fault in part, if people remained clam they wouldn't worsen the problem by running to the bank and withdrawing their shares and accounts. People wont learn from that but banks will learn not to give out high risk loans to low earners, still bad for us but we can't really complain as we snowballed it.

 

[SilentHunter7]

Well, with the housing bubble, it was more profitable to seize a property, and sell it, because with prices skyrocketing, you could sell it for up to 110% of what it was originally worth. A lot of lenders (Note how I didn't use the term 'bank') would prey on high risk people, who would make their payments for a few months, and default. Or they would raise interest rates for people who COULD pay.

And banks loaning out high risk money is just bad business.

Either way, I say they made their bed, let them sleep in it.

 

[Imitation Saccharin]

Aside, does anyone here wonder what will happen if Bank of America goes under? If everyone makes a run on the banks, We'll be in another Great Depression. The FDIC wont be able to cover all the withdrawals. Not with the Treasury is such a sad state.

Welp, then I vote for the NDP, get the border flow closed, and engage in Operation "Canada is self-sufficient", laughing at all you poor Yankees.

 

[Azhrarn-101]

wouldn't the US technically become Chinese property if the central bank went belly up? (Since China holds most of the hundreds of trillions of dollars in loans the US goverment currently has)

 

[milomalo]

wouldn't the US technically become Chinese property if the central bank went belly up? (Since China holds most of the hundreds of trillions of dollars in loans the US goverment currently has)

maybe... :S im not american so... im not worried... XD

 

[SilentHunter7]

wouldn't the US technically become Chinese property if the central bank went belly up? (Since China holds most of the hundreds of trillions of dollars in loans the US goverment currently has)

No, our government would just not pay it back. Either they'll forgive the debt, our trade relations become non-existent, or we go to war. Either way, we win ^_^

 

[milomalo]

but ... they are too many... how you will win a war agains that=?

 

[Madrak the Red]

wouldn't the US technically become Chinese property if the central bank went belly up? (Since China holds most of the hundreds of trillions of dollars in loans the US goverment currently has)

No, our government would just not pay it back. Either they'll forgive the debt, our trade relations become non-existent, or we go to war. Either way, we win ^_^

Dude, if the US goes to war with China, you are all very, very dead. They would beat you hands down. And if trade relations go down, you are in sooo much trouble. Cheap goods? Food? Raw Materiels? All gone.

I would have felt the compassion to gloat over the fact that I am English but if the US goes down, we all go down. Damn capitalism. I really don't want another 1929. Two depressions in less than 100 years? That would suck royal.

 

[meatloaf231]

We are so screwed.

Truer words never spoken...

Well, time to move to Canada.

 

[milomalo]

Dude, if the US goes to war with China, you are all very, very dead. They would beat you hands down. And if trade relations go down, you are in sooo much trouble. Cheap goods? Food? Raw Materiels? All gone.

I would have felt the compassion to gloat over the fact that I am English but if the US goes down, we all go down. Damn capitalism. I really don't want another 1929. Two depressions in less than 100 years? That would suck royal.

thats what i meant XD

 

[Anton P. Nym]

Aside, does anyone here wonder what will happen if Bank of America goes under? If everyone makes a run on the banks, We'll be in another Great Depression. The FDIC wont be able to cover all the withdrawals. Not with the Treasury is such a sad state.

Welp, then I vote for the NDP, get the border flow closed, and engage in Operation "Canada is self-sufficient", laughing at all you poor Yankees.

And that's why I'll never vote NDP, because for all the perfessers they've attracted their grasp of economics sucks. Canada's major export market is the US; that's what pays for our jobs, because we got hooked on easy access to the biggest economy in the world. If our US pusher goes under, our Canadian economy will get the D.T.s pretty badly and very quickly. It's a nasty habit to kick, this NAFTA thing...

-- Steve