Comments on: Does the credit crisis affect “us?”

By: gm

gm — Thu, 02 Oct 2008 10:18:07 +0000

I wonder if this financial/credit/economy crisis will have a “dominoe effect” . I just thought at some point in the future it could affect everyone’s job and place of work and not just the average people who are struggling for credit to buy a car. Don’t really know. (Obviously I never majored in econ or finance nor did I take a class in those fields.) Of course, some people or someone will benefit from this financial fiasco. Something doesn’t look or feel right to me.

By: Camille

Camille — Wed, 01 Oct 2008 18:24:58 +0000

the resulting inability to obtain credit will disproportionately affect lower income households (including many in my district) looking to get loans for housing, transportation, or to open small businesses.

Abhi, this has already been happening. The people who will feel the crunch next are middle-income owners (many of whom are already crunched) -- low-income households haven't been able to get (non-credit card) credit for months.

By: lifelong

lifelong — Wed, 01 Oct 2008 18:22:20 +0000

P in the USA--

sorry to hear that your job was a casualty. Take advantage of a little free time to spend with your gf. also, there will be plenty of jobs shortly for people your skill set. you will be tapped to unwind and revalue MBS and ABS. I'm not being cynical, it's just that I've been through some economic cycles and that is how it works. In the meantime, take care.

By: rob

rob — Wed, 01 Oct 2008 00:26:05 +0000

so rob and hit me bull one more time: do you refute/agree that MM assumptions hold in the current market? why/why not?

Well, obv. some of the MM assumptions don’t hold–there are taxes (e.g. corp div’s not deductible but interest payments are), bankruptcy’s not cost-free. But, there are still good insights to be gotten by deploying MM–sort of like the Coase Theorem–sure, our world has transactions costs, but–Coase Theorem still has nice insights.

By: Puliogre in da USA

Puliogre in da USA — Tue, 30 Sep 2008 19:38:54 +0000

puli..nooooo...wott...moo??

happens to the best of us...

By: Jeet

Jeet — Tue, 30 Sep 2008 19:33:10 +0000

puli..nooooo…wott…moo??

By: Puliogre in da USA

Puliogre in da USA — Tue, 30 Sep 2008 17:53:51 +0000

im not sure why these banks shouldnt fail. i mean, they bought a bunch of shitty assets that went down in value. sounds like they should be going under.

By: Manju

Manju — Tue, 30 Sep 2008 17:38:58 +0000

so rob and hit me bull one more time: do you refute/agree that MM assumptions hold in the current market? why/why not?

its alittle hard to untangle but my guess is rob believes MM doesn't hold b/c the market's inefficiient. so if he were to support the bailout it would be with warrants.

Krugman appears to believe MM holds b/c a govt auction would bring back rationality. so, ironically, he doesn't care for the dems idea of an ownership stake in the companies b/c the price of the now toxic assets will adjust to offset the value of any warrants the govt receives.

he'd prefer an aig-like nationalization, but thats unfeasable, so he's left supporting paulson. i think.

By: bess

bess — Tue, 30 Sep 2008 17:38:19 +0000

living at home would make the relationship side of things lamer.

hehe. I was joking about the parents. Good luck to you, Puli! (maybe PepsiCo is hiring)

By: Puliogre in da USA

Puliogre in da USA — Tue, 30 Sep 2008 17:30:00 +0000

I knew it! Are you on a serious job hunt or are you kicking back at your parent's house?

serious job hunt. staying @ my own place. living at home would make the relationship side of things lamer. im basically applying to every job on earth in a panic so i stay in my own place.