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The Bailouts: Am I The Only One Freaking Out With All Those Zeros?

By
Real Estate Agent with RLAH@properties AB95346

OK.  I'll admit it.  I avoid bad news like the plague.  I just don't want to read or hear it.  Not in the Washington Post or Wall Street Journal or CNBC.  I even skip most of the bad news blogs here on Active Rain.

Yes, so I am a Pollyanna!  I admit it!

Even so, I'm sorta kinda aware that the economy is going down the beautiful new water saving Toto toilet in my remodeled bathroom, and I know just enough to understand most of what I do read and hear.  Still, I try not to let it interfere with my work of helping my clients to buy and sell homes.

Then yesterday I had a conversation with my favorite guy.  He's an economist with not only street smarts, but also a string of degrees from several of the country's finest universities, and he's the smartest person I know.  He gets paid really big bucks to explain the quirks of the economy, mostly to oil company folks.  But he really understands the housing market as well, and I get the benefit of his knowledge for free. 

And he pointed out something yesterday that stopped me in my tracks:

The total amount of the bailouts to our financial institutions now exceeds $1trillion dollars when you add it all up. 

Then I started to wonder how much is out there in mortgage loans.  If you added up every mortgage balance for every home in the US, how many trillions would that be?  So I checked some web sites and finally called the National Association of Mortgage Brokers.  When nobody there had a clue, I got a little nervous.  If they don't know, who does?

Couldn't find it on any of the government web sites either.  Hmmm.  Troubling.  Very troubling.

Anybody out there have the answer?

Last night on The Daily Show, there was a clip of one of the news channels many talking heads trying to explain the numbers to idiots could understand.  As she put it, the bailout involves the amount of money that it would take to buy 2,000 McDonald's apple pies for each man, woman and child in the country.  I got a little sick to my stomach thinking about eating just one of the things.

So there are all of these numbers being thrown out there.  And I, for one, am finding them way too big to get my arms around.

Oh, yes, and then my very friend went a bit of a rant about how they are running the printing presses at the mint overtime to pay for it - and I got a very scary explanation of what is likely to happen to our currency as a result.

Ignorance was bliss - at least for a while.

 

 

Patricia Kennedy
RLAH@properties - Washington, DC
Home in the Capital

Janna, now see?  You prove my point!  You left off 2 zeros, which would be $700,000,000,000!  But the real number looks like $1,000,000,000,000, plus a bit more.  Yikes!  I'm getting the hives!

Sally, if I had kept to the apple pie thing, I could have posted in the Positive Attitude For The Weary Soul group!

And Renee, that's what free enterprise and capitalism are all about!

Sep 24, 2008 09:45 AM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Pat, when someone said something like 700 billion dollars I thought the war in Iraq spending was cheap. I can't comprehend it either. Where is all this money coming from?

Sep 24, 2008 09:47 AM
Frank & Jodi Orlando
Frank & Jodi Orlando Get Us A Home Realty Atlanta Homes Sale - Cumming, GA

Not a good sign when your calculator does not work on that high of a number. So, when they manufactured the things they thought, what dork needs 700 billion to calculate??? I need a martini...

Sep 24, 2008 09:53 AM
Michele Reneau
Certified Staging Professional (CSP) Elite Instructor - Summerville, SC
Realtor, GRI ~ Charleston, SC Relocation Experts Team

I'm totally against the bail out for many reasons, but unfortunately, it seems that we have to choose the lesser of two evils.  If the bail out doesn't occur, investors will pull out of the stock market in droves, which means big companies will not have credit to operate and then they will also fail. People will lose jobs, pensions on a big scale.  And you can imagine the mess as it continues to snowball. It's a slippery slope and it's messy.  I really think that banks that made bad loans just suffer and suck it up or they need to go pull guys, like Countrywide's past CEO, and auction off his stuff to contribute towards the cost. 

Sep 24, 2008 09:54 AM
Amanda Evans
DFW Living - Fort Worth, TX
Real Estate Broker - Fort Worth Texas

Did he tell you that we don't even have $700,000,000,000 in circulation?  It was hard to imagine and my headache got worse as I tried to fathom it--then I realized it doesn't exist.  How do you like those apples? 

It was a hell of a party.

 

Sep 24, 2008 10:06 AM
Patricia Kennedy
RLAH@properties - Washington, DC
Home in the Capital

Gary, where is it coming from?  Try the government printing presses, much like the currency of the Continental Congress.

Frank & Jodi - and Amanda, too!  I'm heading out to Calvert Woodley Wine and Licker for a bottle of Grey Goose!  We can have a virtual party! 

And Michele, I agree with you.  And this is one of those times I would like to have a President who is smarter than I am.

Sep 24, 2008 10:27 AM
Craig W. Barrett
RE/MAX 100 - Hughesville, MD
Hughesville MD Real Estate

So when the Mint circulates too much money, that depresses the value of the dollar, increases "safe harbor" or speculative investment in things like oil, increases the risk of inflation, and thereby stagnates any potential growth the economy would realize by the bailout. Right?

As I see it, we're at a crux in economic and American history.

Sep 24, 2008 10:31 AM
Marchel Peterson
Results Realty - Spring, TX
Spring TX Real Estate E-Pro

Patricia, My head has been buried with Ike and now that I am starting to get some news I'm thinking maybe I need to put my head back in the sand.  I do hear a rumor that we might get our power back tonight but that's not going to help my cable problem.  I'm not thrilled about only being able to watch the 4 main TV channels, oh and PBS. 

Sep 24, 2008 11:36 AM
Fran Gaspari
Patriot Land Transfer, Inc. - Limerick, PA
"The Title Man" - Title Insurance - PA & NJ

Patricia,

As our dollar is devalued, will the old adage become "a halfdollar for your thoughts"...! LOL, Thanks,   Fran

Sep 24, 2008 11:36 AM
The Somers Team
The Somers Team at KW Philadelphia - Philadelphia, PA
Delivering Real Estate Happiness

I just watched President's Bush speech urging the plan to be passed... it is scary.  I do believe though it is the best option to save the financial markets from collapsing.   There is even a chance the Govt makes money on the plan : ) ... probably a small chance though : )

Sep 24, 2008 01:33 PM
Elizabeth Nieves
The Elizabeth Nieves Realty Group - Durham, NC
Bilingual Raleigh - Durham North Carolina Real Estate Team

OH MY! That is a LOT of money...and a LOT of apple pie. IF that doesn 't wake us up, nothing will. GBU!

Sep 24, 2008 02:06 PM
Carol Culkin
Diamond Partners Inc - Overland Park, KS
Overland Park Residential Real Estate

Pat - Yup, those zeros are causing me some anxiety too. History in the making for our country and God only knows what the future holds.

Sep 24, 2008 02:43 PM
James Downing - Metro DC Houses Team REALTORS®, CRS, GRI, ABR,MRP, MilRes
Real Living | At Home - Washington, DC
When Looking to Buy or Sell - Make the Right Move

Great - now I need to start stuffing more money under my mattress!  Where will I hide?  Actually it's a great time to invest.... in Gold !

"Keep your hands and arms in the ride at all times.  It's gonna be a bumpy ride".

Sep 24, 2008 02:51 PM
Jeanean Gendron
The Address Realty - Redding, CA
Specializing in Selling Unique Properties

Patricia, thanks for posting on this....I've felt like a outcast...with my concern for this Crisis and our responsibility to communicate to our representives. I'm much as you have described....mostlly business minded with a positive attitude but disaster is disaster and we do need to be aware of it and respond. Thanks for this post!

Sep 24, 2008 02:59 PM
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re

I like pie will they be coming in the mail or will I have to walk to the nearest location since I can't afford to buy gas ?

Sep 24, 2008 03:29 PM
Thesa Chambers
West + Main - Bend, OR
Principal Broker - Licensed in Oregon

too funny - another agent and I were just talking about this today - we figure we should all submit our monthly bills for a bail out.... what do you think

Sep 24, 2008 04:07 PM
HomeFinder.com Real Estate
HomeFinder.com - Chicago, IL

You're definitely not alone Pat. While I know you mentioned that you try to avoid the news like the plague. This is a really great article in the NY Times (http://www.nytimes.com/2008/09/23/business/23skeptics.ht) explaining the need to take our time to rethink this plan.

As for your question if anyone out there have the answer? It's no. My friend's getting his MBA at the University of Chicago right now and a group of top leading economists from the school have drafted a letter to congress telling them that the government's proposed plan is so convoluted and complex that there needs to be more time invested in understanding it. This is from a group of bipartisan economists who read the proposal in full and said in their conclusion that there is not a clear answer or layout of as to how the $700 billion will actually rescue the financial markets. Scary thought. 

Amy   

 

Sep 25, 2008 08:47 AM
Don Rogers
Keller Williams Realty Chesterfield - O'Fallon, MO
Realtor, Broker, CDPE, GRI, OnullFallon MO & St Charles County MO homes

Pat,

Does anyone know how much this bailout is going to cost each of us?  I have heard everything form $23.00 to $7,000.00 per person!  Now they are saying that the government could make money off of it.  GEE WHIZ could somebody get their story straight!

Sep 27, 2008 02:01 AM
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

Can you believe that mere individuals play for measly thousands of dollars on shows like Jeopardy? As we Realtors might say, "That's dated." LOL

Sep 27, 2008 03:37 AM
Stefan Swanepoel
New York Times Bestselling Author & International Speaker - Ladera Ranch, CA

Pat, you wrote about it way back when and I just posted the TOP 10 EVENTS impacting real estate in 2008 - see this post - and the Bailout is #1. Check out the list, I think you'll find it interesting.

Stefan Swanepoel
Author: Swanepoel TRENDS Report

Dec 17, 2008 09:21 AM