The Financial Crisis: Users Respond

First King George siphoned the taxpayers money to Big Oil with his phoney wars. Now we should hand the reins to McSame for his 100 years war for the Military Industrial Complex. But before that happens the Banks and Brokerages must first bilk hard working americans 401K's. How else can they do it without this crisis.
RepubliCONS will sell this country down the river all in the name of free market and patriotism.
GOOD LUCK GUYS!!!!!! We have got what we deserve. More is coming down the pike!!!!!!!!!!

— Naush, Florida

This financial crisis is showing its ripple effect as most Wall St firms are inter dependent for different business functions. One company going down is affecting others, and in process, pushing losses for many others. For instance, Lehman's bankruptcy affected AIG, and also resulting in losses for investors like Japanese banks, or Fidelity to name a few. Looks like next few quarters are likely to produce more losses. Tremendous volatility and a clear lack of direction for stock markets will induce more uncertainty for sometime to come.

— Monti, Texas

How about some accountability with congress and yes our president. They forced Freddie and Fannie to take on addtional risk and Wall street followed the leader. Nobody cared about risk just do what sounded good. These entites got way to big and congress just thought of it as another goverment program. Every member of congress and yes all the execs that took big payouts should be the ones required to empty their personel wallets before mine.

— David, Florida

Frankly, I won't be satisfied until I see some Wall Street Brokers going to jail, including some Executives. They have been running nothing more than a modern day Ponzi scheme the past 8-10 years and should pay the price. Some of the Stock Entertainment clowns(i.e. Cramer) are just as culable with their constant hype.

— Allen, Oregon

Isn't it incredible that this all started because of 100% stated income financing to subprime borrowers? They can't pay their bills with $1000 in rent & now their housing payment is $3000, what did they think was going to happen? The worst part is the rating agencies(moodys, S&P, Fitches) were stamping F paper with an A rating. That is why nobody is buying the paper and the credit crunch is happening. When are the rating agencies going to get sued?

— Don, California

All crises like this one come down to an abuse of credit. The Tulip Crash, The Great Crash (when margin was only 10%) and many, many more.

Credit, of course, allows for more rapid growth than cash (or gold based currencies) but societies can only rationally deal with so much growth without horrible distortions. Don Regan had effectively forced the repeal of Glass-Steagle before it ever happened. Clear lines of regulation were blurred and with the late 1990s packaging of all kinds of financial instruments, responsibility and accountability went out the window.

All of this came as a massive group of retirees prepares to rupture the budget even further. As a nation, we deserve this. As a person with no debt, actual savings and investments in multiple nations and a holder of Gold I shouldn't suffer from it; but I will.

When governed by politicians who have a cumulative economic IQ roughly equal to their belt size, ". . . all are punished!" When the money managers of the country thought that lending and investment required no backing but thin air and a good credit rating, it may well be that now ". . . all are screwed!"

— Bill, New York

The housing market was the catalyst and it isn't too much different than investing in the bubble. Investing in companies who never turned a profit seems equal to giving credit to people with little or no assets. Leverage turns into a bubble. Same thing for financial institutions..many were just lemmings heading for the same cliff. Hope this clears out the pigs and points us towards earning and paying our way out of debt both as individuals and a country. Thank God for the average consumer. Hope the GDP growth just isn't the result/impact of the constant growth of illegal immigrants. Guess the fed will just have to keep the printing presses going for another year at least. Thank goodness, a couple of years back, I took Joe kennedy's advice from 1927 when he started getting investment advice from his cook. He pulled up stakes and waited it out. Why don't you do a show or segemnt comparing the US in 2009 to Japan in 1989!

— Dave, Maryland

Time to stop Trickle DoWn philosophy of the Reagen Years Im afraid it went into the packets of CEO's who mismanaged us into this mess.

— Norman, Florida

This is going to be much longer, deeper and broader than what we are being told. It looks as though our "Goldie Locks" economy has turned into the "Humpty Dumpty" economy and all the President's men are trying to get Humpty back together again but it will take a few years to get over this. Folks we are heading into a very long and severe recession, hence a depression.

— Alexander, Oregon

Inwatching the drama surrounding lehman bros, i was left with one question--where were the regulators in all of this---also--why was the short rule put in for apx 19 days by cox eliminated---i have not seen the names of any regulator identified concerning this mess, and must wonder why the press has failed to do so.

— Wally, Pennsylvania

Let's put more 20 something MBA's on Wall Street, solicit investors with toxic waste derivatives, rake in outrageous bonuses, and then watch the house of cards fall. This day is poetic justice.

— Jeff, Pennsylvania

Neil in Florida was partially correct in blaming the repeal of glass-steagall. The deregulation of the financial industry under Reagan, Clinton, and Bush (to a lesser extent) is a mistake. I am a free market, anti-regulation guy, but the financial industry is too important and too frigile to not be tightly regulated. We have also allowed far too much consolidation; allowing the creation of firms "too big to fail."

Having said all of that, the main culpret is the tax structure which rewards extra leverage. I'm sure many who took college finance classes remember going through the exercises showing how issuing debt, buying back stock, and deducting the interest payments increases return on equity. This is insane. If financing by debt is deductible, then so should financing through equity. Dividends should be deductible on corporate taxes (you can go back to regular income tax rates for those receiving the dividends, a lot of them are received in 401k's, IRA's, etc. anyway). Make interest on debt only partially deductible. Get rid of these isane tax policies that incourage businesses to take on extra leverage or grow outside of there area of expertise seeking to increase shareholder wealth by capital gains instead of simply making money and sending it back to the shareholders.

By the way, handing out more dividends helps get rid of a lot of the accounting scandles that we have experienced, because smartest, most corrupt accountant in the world can't make money appear out of thin air to give back to the shareholders.

— Adam, Kentucky

The uptick law was repealed in july 2007 as cramer said and bernake is no greenspan !!!!!!!!!!

— Andrea, Massachusetts

What in the world happened to capitalism! Why aren't these institutions allowed to fail completely? We privatize the profits, but socialize the losses. As a taxpayer I find my governments involvement in this appalling. Greed created this so let the chips fall where they will. I'm not interested in "saving" anybody from their own stupidity.

— Tom, Florida

This whole thing was caused by GREED from TOP TO BOTTOM based on EVERYBODY "FAKING THE FUNK" and not ACTING THEIR WAGE!!!

— Cool V, Pennsylvania

Everybody profited from the unwarranted expansion of credit - the real estate agents, mortgage brokers, pension managers, investment bankers, auto companies and the consumers.

And worst of all, while the politicians are waving the American flag on TV commercials, they never mention that they're selling it to foreign investors, star by star, stripe by stripe.

We all played a role in this.

— Ivory, Washington, DC

This is a very much needed crisis to sort out the mess created by the corrupt, irresponsible and unsupervised barbarians of wall street.

— Mazen, Dubai

GREED & STUPIDITY have taken over common sense. This country has lost all its morals and values.

— L, New York

It is part of the correction process in this troubled market. The weaker firms (big and small) will fall as their risky plans fail. This is good news in disguise.

— Richard, Mississippi

Financial transactions are end result of a value being created/destroyed. It is clear to me now that unscrupulous greedy people have destroyed value forever for a lot of hard-working people in this country.

Wake up Bankers and Politicians. Science and Engineering are long term value builders. . Stop paying financial geeks loads of cash and start recognizing your engineers who actually create value.

Financial transactions are result of value creation. For the past 7 years value has been destroyed in every industry, except finance. This is what we get for that.

— Vishal, Texas

Thanks to this republican administration, we are in another financial crisis.

— Donald, Illinios

I would let all these big companies fail on their own merit. The Government is acting like the Parent who bails their kid out of jail for continuiously do stupid things. He won't learn anything if you keep putting a pillow on the ground before he falls.

— Jeff, Pennsylvania

Bush just stated that he is going to finish his term, STRONG. Tell me, am I hallucinating or is he?

— Shan, Washington, DC

Plain and simple: greedy lenders giving loans to greedy overextended people and greedy investors willing to buy the paper. Time for everyone to sell there overinflated assets.

— Michelle, New York

Let um fail. In a Capitalist market place we much return the right to fail so only the fittest will survive.

— Michael, California

I believe the government is the biggest player too blame. Everybody borrowing their Future away and passing the Buck for someone else to bear the Brunt.

With all the debt people have accumulated the Increase of Fuel and Staples have left the average Citizen strapped for cash. With no way too pay any more than the minimum payments and no cash too invest in the Markets or Housing. That caused the allowance of Lucrative "shady" lending practices and the fall of our Economy. Things WILL Not Improve Until Inflation is put In Check or Salaries Increase at least 15% or price of goods fall 15%.

— Mark, Georgia

t is a culmination of a 30 years long period of systematic attack on labor in the industrialized world. Lost wages were replaced by a debt pyramid scheme, which is finally unwinding. The crisis will continue to deepen, though with ups and downs, until some balance of power between labor and capital is restored.

— Mike, Virginia