Comments on: A better understanding http://leafingthrough.net/2008/10/08/a-better-understanding/ a life Wed, 08 Feb 2012 07:45:41 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Special K http://leafingthrough.net/2008/10/08/a-better-understanding/comment-page-1/#comment-8601 Special K Wed, 08 Oct 2008 22:43:59 +0000 http://leafingthrough.net/?p=871#comment-8601 ok you're gonna have to explain everything to me in special k baby words when we meet up. ok you’re gonna have to explain everything to me in special k baby words when we meet up.

]]> By: mim http://leafingthrough.net/2008/10/08/a-better-understanding/comment-page-1/#comment-8600 mim Wed, 08 Oct 2008 21:34:37 +0000 http://leafingthrough.net/?p=871#comment-8600 I liked this explanation (via <a href="http://kottke.org" rel="nofollow">kottke</a>): http://bygonebureau.com/2008/10/01/the-financial-crisis-as-explained-to-my-fourteen-year-old-sister/ :) But it doesn't explain to me why, for example, the executives at AIG got their bonuses when their company was doing bad. Or why they got a retreat worth $400k, or whatevers. :p I liked this explanation (via kottke):

http://bygonebureau.com/2008/10/01/the-financial-crisis-as-explained-to-my-fourteen-year-old-sister/

:)

But it doesn’t explain to me why, for example, the executives at AIG got their bonuses when their company was doing bad. Or why they got a retreat worth $400k, or whatevers. :p

]]> By: Leaf http://leafingthrough.net/2008/10/08/a-better-understanding/comment-page-1/#comment-8599 Leaf Wed, 08 Oct 2008 13:15:17 +0000 http://leafingthrough.net/?p=871#comment-8599 That was my issue too. What's going on? Why are people crying bloody murder about this bailout? Frankly, it sounds like we need it. The worrisome thing now is, hopefully we don't fall into a situation like in Japan where as the interest rates lowered and lowered, people got more scared and wound up hoarding money even more! Anyway, so now whenever you hear "Fed cuts key rate" or "Federal Funds rate lowered" you know they're just buying and selling bonds and it's the banks reaction with all their loaning and borrowing that's truly setting the Federal Funds rate. Take today's headline in the Post for instance, "<a href="http://www.washingtonpost.com/wp-dyn/content/article/2008/10/08/AR2008100800847.html?hpid=topnews" rel="nofollow">Fed Orders Emergency Rate Cut of Half a Percent</a>." just means they're buying up bonds like crazy and putting money in the system. That was my issue too. What’s going on? Why are people crying bloody murder about this bailout? Frankly, it sounds like we need it. The worrisome thing now is, hopefully we don’t fall into a situation like in Japan where as the interest rates lowered and lowered, people got more scared and wound up hoarding money even more!

Anyway, so now whenever you hear “Fed cuts key rate” or “Federal Funds rate lowered” you know they’re just buying and selling bonds and it’s the banks reaction with all their loaning and borrowing that’s truly setting the Federal Funds rate. Take today’s headline in the Post for instance, “Fed Orders Emergency Rate Cut of Half a Percent.” just means they’re buying up bonds like crazy and putting money in the system.

]]> By: cuivi http://leafingthrough.net/2008/10/08/a-better-understanding/comment-page-1/#comment-8597 cuivi Wed, 08 Oct 2008 12:44:15 +0000 http://leafingthrough.net/?p=871#comment-8597 Very Cool! I've been getting sick of all the coverage in the press and still not getting a good picture of what's happening and why. Very Cool! I’ve been getting sick of all the coverage in the press and still not getting a good picture of what’s happening and why.

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