Economic unraveling...can it be a GOOD thing?

[FirstLight]

So, I am really not very good with this economy stuff...but if the corporations that are holding people's credit lines and mortgages unravel, what happens to those who have thses credit lines? Do they get a grace period while the company restructures, do they get out of a number of payments...are their repayments forgiven? how does this work?
If enough institutions go under, will those who owe said institutions money get to "skate" for a while while the whole thing is re-built?

I guess it would take a greater scale meltdown than what I am thinking of, but it may not be so far out there. So what IS the worst case scenario here?

...and can bushco still use this as a way to call off the elections...? will things get that outta control?

[Name removed]

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[high density]

2. Grace period? What's the precedent for that?

If a bank fails, its assets (loans) are sold to other financial institutions. Your mortgage doesn't go away because the bank failed. It goes on as normal and is serviced by somebody else.

[FirstLight]

4. I don't know...what if there isn't another bank to buy it?

told you I am not really good at this, so just humor me...maybe some wishful thinking... (If my student loan will be forgiven, lol)

[high density]

6. If there isn't another bank to buy it then it's over

Our money is worthless and we're all unemployed.

[tannybogus]

3. NO! You don't want unraveling.

You don't want to start something you can't stop. If it starts rolling downhill

there will be the shitstorm to end them all. Don't panic people.

[FirstLight]

7. Wel, at what point is the unraveling going to head that way..?

How many banks have gine under this year alone, and how many of those were BIG ones? This just seems like a wierd version of the twilight zone...

will this be anything like the great depression, worse? what if we have to entirely re-think our way of dealing with value and money and such?
wil the barter system make a comeback?

[MadMaddie]

5. * would be a fool to try to call off elections.

It would lead to civil unrest like we have never seen.

The crash of the market will force Congress to regulate all industries again.

Phill Graham McCains former financial advisor is directly responsible for this. We need to tie them together over and over again.

[FirstLight]

9. How can congress do that when they are

pretty much out of power and the govt is bankrupt too? do we all end up auctioning off everything to the highest bidder...would china end up 'owning' much of the US?

[MadMaddie]

14. I mean after Obama wins!

[Old and In the Way]

15. Here's what I'm concerned about.

Yes, we've run trade imbalances for a long time now and China is sitting a mountain of our debt. But if our financial institutions crater, investors are out of here. No more money to support capital investment projects here. Since we are running a budget deficit and our national debt is in the trillions, there's no solution in the public sector that doesn't entail massive tax increases.

The good news is that the Republican brand will be toast and people may now have a new appreciation for government regulation to keep an eye on the crooks who have had their way since Reagan.

[Old and In the Way]

11. I agree....get prepared for the political "pin the tail on the donkey"

The tail being Republican malfeasance.

Here's a good link to the Act that started this mess:

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act



And Obama's thoughts on the banking crisis:

http://www.realclearpolitics.com/articles/2008/03/obama_on_political_capital_wit.html

[mckara]

8. It's the End of the World as We Know It...

Bush :toast: McCain

What Social Security? What Medicare? What Dollar?

[freespirit5]

10. This is Bush's fault. People will flock to Obama

nt

[FirstLight]

13. Welcome to DU!

...and I agree that we wil see more people flocking as the weeks play out.. Bushco tried to keep things from coming apart before the election, but once the mudslide started, they are ill equipped to stop it...

I for one am not looking forward to the bumpy ride we are looking at, but I also wonder at what point can we wipe some of the slate clean and begin to re-write our financial rules. Obviously this is probably too simplistic a view, but I am all for getting out from under these loan sharks that are trying to run the show!

[Kurt_and_Hunter]

12. Ordinary people's debts never go away. They'll just get transfered

It's like the Sopranos. If a loan shark gets whacked all it means is that somebody new shows up the next week for payment.

[FirstLight]

16. Dammit...I keep hoping that somehow this will "help" the little guy!

I hate banks! :mad:
Maybe cuz I don't have enough money to keep in one! lol