Ok, I don't really think so but I keep seeing that headline. I can see in the coverage that they will pass something.
If you read nothing of this post, read the time article here. It has a great perspective on what yesterday's vote really represents.
(Note: i wrote this on the bus and didn't have time to proofread it :(
So this morning I am going to walk around to a few banks and move my money around a little.
After last night I remember why most people don't think about big world scope events too often. I wanted to find out more details on what happened yesterday with the bailout so I read some stories and called my brother. Then I didn't sleep well and had bad dreams.
If you would have asked me yesterday I would have told you I don't want the bailout, but now I'm not sure. It's natural for an economy to rise and fall, to naturally correct itself. But we have not allowed that to happen for so long that we are in the situation we are in today. The economy has been in trouble since 1990 and we have been artificially propping it up. We saved the economy from recessions in 1990, 1994, 2001. Every time they artificially prop the market up it makes the eventual fall worse. That is where we are today.
Every time they lower the interest rates any of my friends looking to buy a house are happy, but I get scared. "Record low interest rates!" Again!? Every time they do that I think "They are doing that to keep people spending because the economy is in trouble." But that is only going to work for so long. What will happen when they cant save it anymore? Well that is where we are today, it finally got out of control because they couldn't save it with lower interest rates or the other normal tools in the financial arsenal.
But $700 billion dollars. I don't believe that will save us forever. So if this is just another stop gap measure, if it takes $700 billion dollars to save us for a while than what will it take if that doesn't work? Every time we push it off it makes it even worse the next time. If it takes $700 billion dollars this time, what will it be like when that is unsustainable.
Remember, the point of all this is to KEEP YOU SPENDING. The money they are using to prop up the banks wont make your life any easier. If you are barely scraping by, you will continue to barely scrape by. If you and your spouse both need to work, you will both need to keep your noses to the grind stone. And if you have been living life on credit cards without a care in the world you will keep on charging because for you the world hasn't changed.
But continually falling interest rates, banks going bankrupt and being bought out of the blue are signs that things are not getting better. Things are downright weird. There is a thing called derivatives that are hard to understand but from what I gather are insurance against bad debits. The worldwide derivative market is estimated at somewhere between 400 and 500 trillion dollars. That is almost 10 times the entire global Gross National Product!! How can an economy like that even exist!? This is new. The global derivatives market has been growing especially over the last 10 years so this is something new.
Honestly, I don't even know exactly how the derivatives will tie into all this but the fact that a market can be that big is a sign of how much is going on when no one is looking. I know they are part of what lets banks keep good numbers on the books but I dont totally get it.
Even with all the shifting of numbers and lowering of interest rates, has that really helped normal people? No, the seperation between the rich and poor has been growing. I think my favorite article about what happened yesterday is this one from Time. It frames the rejection of the bailout as a revolt. And I think that is what it was. If the economy doesn't get this times will get hard. So of course the politicians are going to vote for it. But they were so inundated with calls that they didnt dare vote for it. This is a decision I think the people actually made. Maybe partly because they don't understand how bad things will get, mostly because they see no reason that their money should go to these few rich people that fucked up.
But I can see in the news coverage today that the vote will swing. The reality of how bad it might be will start to sink in and there will not be as many calls next time. It will go from fury to a feeling of helplessness in a system that is to big for them to understand. They will let their leaders do what they think is right, even though they don't know either and are just as scared.
Jesus, i wish I was my brother so I could explain this better. But thanks for listening, I'm glad I got that out. :)