Economy part 2

The Wall st. companies took a calculated risk, but they wanted insurance just in case it didn't work out. thus, they agreed to credit default swaps with insurance/financial management firms like AIG, Lehman bros, Wells Fargo. they were willing to sell these credit swaps which said that the banks would pay a little money, and if the credit they loaned was defaulted on, these companies would pay them back. it wasnt an issue until recently. okay, so now its late 2008 and the people all the sudden cant make payments on their homes. well, they start to default on their credit they borrowed, thus foreclosures, and bankrupcy. so as these people couldnt pay for their houses, the finance firms who sold them the swaps couldnt pay them the incredibly huge sums they owed. thus, the banks like Bearn Sterns went out of business or got bought out cheap becuase their revenue cut off. wachovia had 80% of thier loans subprime, and they were recently sold for next to nothing. anyway, with these companies dropping the stock market started to drop, leading to losses for financial managment companies. through all this, hedge funds, saw an oppertunity to capitalize by selling stocks short (sell at current price, and then buy back in a certain period of for that price, for example, sell at 60 dollars..6 months later buy back at 30 for a profit of $30) All of this negitive sentiment and power to the negitive side drove prices even lower until Chris Cox finally banned short selling on banks for about a month, and now the ban has lifted. all of the stock market problems is leading to a recession..yes leading..were not in a recession yet. we need 2 or more quarters of negitive economic growth shown in the GDP. this quarter should be one, and next should be 2. it also lead to this bailout which is going to save everyone from great depression like declines, and help to the banks and finance houses (AIG, etc) to help them survive. anyway, thats how we got to where we are. SO WHAT ARE THE CANDIDATES GOING TO DO TO HELP US.

Well, McCain has talked about buying home mortgages recently, but previously talked about letting the free market do its thing. the American public doesn't want to hear that, considering the free market is what got us into this supposedly. less government intervention would have prevented this situation. how ironic that were going to be getting more reguation when it was reguations that got us into this. to me, long term we need to let the market work, but short term we definitly need government help. Obama has talked about similar mortgage programs, and tax relief for middle class families. i believe that we shouldn't have more government in the long run,and Obama has been clear that he intends to turn us into a near socialist country, Yet, i think that McCain is been pretty flip-floppy and he would do a awful job dealing with these problems. therefore, i would rather have Obama than McCain, but really neither of them have plans that i believe are really good in the long run, but i'd be willing to take a chance on the long run for the short term fixes....hmm that sounds familiar.
-Bwa