The world economic situation

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The world economic situation

Postby Aspman » Tue Sep 30, 2008 3:29 pm

I'd like to float a question, because I don't know the answer.

What would happen if we let the bankers burn?

i.e. no bail outs, no nationalisation. We just let bad companies sink.
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Re: The world economic situation

Postby Morganlefay » Tue Sep 30, 2008 3:53 pm

I dont know the answer either but this article was very interesting

http://www.time.com/time/business/artic ... ml?cnn=yes

Whos bailing out the little guy

I say burn baby burn :mrgreen:

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Re: The world economic situation

Postby Opus » Tue Sep 30, 2008 4:38 pm

There would be no loans to buy a car or buy a house, McDonald would not be able to get a loan to expand or what ever, it has far reaching effects. I don't think you'd like the results of a failure more than not liking the fact that these financial companies are getting bailed out
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Re: The world economic situation

Postby Morganlefay » Tue Sep 30, 2008 5:03 pm

Opus...did you read the article I posted??

and oh wait ....arent the markets rallying today???

Here in Canada...yesterday was the 17th biggest loss in one day....not the biggest

Appears to be typical Bush administration fear mongering

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Re: The world economic situation

Postby Aspman » Tue Sep 30, 2008 5:06 pm

For the tax payer it's damned if you do damned if you don't.

I suspected as Opus says that it might feel good to watch the bankers tear each other apart for a few months but then we'd be back to building mud huts.

There is just always the idea that Bush/Brown and their buddies are getting to cash in on a crisis of their own making. Several new hedge funds have started to mop up cheap shares. One run by Gordon Brown's own banker.

Personally I have no issue with bankers making huge bonuses as long as that feeds back into the wider economy and we don't all end up in the shit because of it. A moot point by the looks of it. I'm still against stopping these guys making money. I'd just like them to spend some time in a cell with Bubba if they f^ck the whole system to cash in.
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Re: The world economic situation

Postby keezel » Fri Oct 03, 2008 11:38 pm

I'm inclined to agree with MLF as far as the fear mongering goes.

My issue is with the apparent fact that Bush's whole economic philosophy is to pour our assets into large companies and expect that the benefits will eventually filter down to :pleasantry: "Main Street" workers. Unfortunately, that hasn't happened. The inclination for large businesses to outsource labor to India has been blamed, but I think the idea is fundamentally flawed. Large corporations are the backbone of our economy, but you can't expect them to also act as charity organizations - you have to throw a few bones to the middle class citizens as well.
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Re: The world economic situation

Postby DaFoxx » Sat Oct 04, 2008 12:06 am

I say 'let em burn'
if I were to miss a couple of payments to my mortgage, I would be out on the streets

they have gambled badly

I had just read a book 'The Black Swan' based on one off incidents, so called because up until Australia was discovered by the western world, all swans were white, it was a 'known' thing, so when black swans were found in Australia !!!!

so if our illustrious bankers had held on to a little reality, they would not be in this mess, but greed, and a belief that the market can 'only' go upwards meant they were not prepared for their black swan moment

at the very least, I would want to see those in 'control' of the money lose EVERYTHING, all assets, cash, pensions, the lot, so that they would have to survive on what we, the majority will have to live on when we retire

but no, the fat cats will stay fat
Bush will protect them
with one TRILLION $$$$$$

he could almost write off damn nigh all of America's mortgages with that amount, and let the people decide where to spend their new found extra pennies

but that, of course, will NEVER be allowed to happen
imagine, a population with no debt

as if .................
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Re: The world economic situation

Postby Egaladeist » Sat Oct 04, 2008 12:07 am

In Canada the primary reason they give to bailing out failing companies is to save jobs...but personally I think it just makes the power/s that be more lackadaisical and more apt to do stupid things thinking they have their butts covered either way.
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Re: The world economic situation

Postby Panama Red » Sat Oct 04, 2008 4:25 pm

In a "true capitalist society" the weak and slow should be allowed to become extinct, those that can compete and do so legitimately should be allowed to flourish, the problem with this bunch on Wall Street is the perception that if all goes FUBAR, nanny (the Government) will always be there to tuck them in at night and read them bed side stories of how the little man will always be there to save their heinies, unfortunately for the economies of the 90's and 00's too much turning of the blind eye went on by the feds, and so because of that we now have the situation at hand.

Hard to believe that watching housing prices skyrocket over the last decade didn't send off alarm bells in the markets, at least Warren Buffet saw the writing on the wall, not the richest man on the planet for nothing...speculators and futures are what's ruining the economies....

As Foxx stated, miss one payment and the bank may allow it once....miss it again and the bank forecloses and sells it off the the next person all the while each time it changes ownership the government receives a windfall due to sales tax, just like here in Canada, if a vehicle is sold 10 times, the Government will receive the HST 10 times, each time less, but none the less still 10 times on one vehicle...

So as far as I am concerned, Banks or Institutions that did not perform "Due Diligence" when handing out credit to people who clearly were unable to carry such mortgages, do not get my sympathy, also I do not sympathize with the buyers as they saw a good deal (Barnum..."Sucker born every minute" comes to mind) so are partly to blame....if you cannot live within your means, then you have no business being saved by the tax payer and that includes the Banks and the little guys who took a chance on the market... :breakfast:
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Re: The world economic situation

Postby Kwiep » Sun Oct 05, 2008 11:05 pm

I hope it wakes some people up to the consequences of what happens with your money if a bank or insurance company goes bankrupt. You give money to some guys, who make sure it doesn't devalue with the inflation rate. If THEY fuck up, they use YOUR money to pay the damages. And they SELL your debt to fund their own retirement. Debt you keep, savings you loose.

No wonder people don't save money, it's a stupid thing to do. Wait a second...
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Re: The world economic situation

Postby rapier57 » Mon Oct 06, 2008 10:54 pm

If it were up to me and the wise choice was to let 'em burn, that's what I'd do. Unfortunatey, this runs much deeper than simply the Wall Street dudes. It is all tied to the sub-prime mortgages, which Congress was warned about several years ago. These would get written, then sold up to another holding company, and so on. The money flowed. The folks in collusion on this at the front end included the mortgage brokers, builders and real estate appraisers who cooked up the values and sale prices of the new homes. Up until everything collapsed, they were the only ones making money. They sold overpriced homes to folks who they knew could not afford them using mortgages that would balloon in three to five years. The developer got paid, the builder got paid, the mortgage broker got paid, and the real estate appraiser got a back door donation. The people who bought the homes had been told that real estate values would continue to go up and in three to five years, they would double their investment. So, who was gonna worry, right?

The investment companies bought up the sub-prime mortgages, overbalancing their financial portfolios with them because the government was looking the other way. They were gonna cash in on this real estate boom, too, ya know.

Suddently, the cash stopped flowing. There wasn't enough. A couple investment banks went under and the uninsured depositors lost everything. Folks with assets in other investment banks quickly beat feet to the bank to withdraw their uninsured assets. Cash flow dried up quickly and CRASH! down came Fannie Mae and Freddy Mac.

Now, developers are sitting there with overpriced and over-valued property they cannot sell, and waiting for the local governments to take it from them for taxes and debts owed. Builders are laying off workers like crazy and building sites are quiet. Lumber is stacked up at sites rotting away. Since no one is around the sites, looter show up to strip copper and other metals from the partially constructed buildings to turn into meth and other drugs.

Bankruptcy filings for builders and developers are starting to increase.

Yeah, it was a house of cards and we could see it coming from as far back as the late '90s. It isn't just the Wall Street dudes that need to be burnt at the stake. Our governments must also face the flames. They are as culpable as the investment bankers and the rest. They ignored the warnings of economics and financial experts, turned a blind eye hoping that the worst would not happen during their tenure.

We need to fix this, then focus on changing some of the regulations--or enforcing the ones in place--to prevent it from happening again. Then, we need to clean house on the government (I'm speaking from the US perspective, here) and make it harder to stay in office so long that you get "good-old-boy" networks that make this possible. And, we should set up performance criteria for lawmakers and presidents. The penalty for not meeting performance criteria at the end of a term of office should be death--public hanging, firing squad, whatever.

And, the "good-old-boys." Lobbyists (special interests, PACs, etc) should be shot on sight when entering the Washington, DC city limits. Of course, they must be registered first. Then become target practice. If a solon listens to anyone who is not a direct constituent, he or she should be tried for a capital crime.


Hmmm ... sorry for the rant. Do you get the impression this ticks me off?
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Re: The world economic situation

Postby Kwiep » Tue Oct 07, 2008 2:41 pm

On the topic of lobbyists, on the other side of the ocean, europeans (just to call em so as I'm refering to european governmenting) should watch out what's happening in the european council and whatever it's all called. Lobbying on that scale is "new" over here. If you don't agree with the american system, you should watch your arse twice as well in europe as they're relatively unexperienced and most susceptible to new "this is how it's done" ideas.

I'm not sure how it's with subprime mortgages over here in the netherlands, but people apparently are uninformed enough to deserve protection against those practices. As for investment bankers, I can't particularly feel pitty. It's their job. They knew what's what and they knew the risks. For those people to not cover their arse is just stupid or an educated gamble they lost. Nonetheless, I'd figure even these institutions would choose continuity over the quick buck. I'm not seeing pension funds make stupid investments like that (I hope!).
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Re: The world economic situation

Postby Aspman » Tue Oct 07, 2008 7:53 pm

What is funny in a way is the way the EU has gone from unified 'everything' to national arse covering in the course of a week.

I think this shows some serious problems with the EU even in the most pro countries like France and Germany. They've shown now that they will piss on the EU to serve national interests if it suits them.

The UK gov is showing that it is completely feckless with no idea what the fuck is going on.

edit -Just a thought. Time to put your money in an Islamic bank?
Sharia banking doesn't allow for the unfunded credit transfers that have fecked the US/EU system.
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Re: The world economic situation

Postby Kwiep » Tue Oct 07, 2008 10:23 pm

I'm not quite sure what you're talking about with the arse covering this week. I do know both france and germany have always been oblivious to european treaties involving money. Especially regulations towards national debt and infation. Nothing new there. All the (big) nations in the EU are in there for their own good. Either to increase their power outside their borders (france/germany), or to receive a feckload of money (spain). The dutch are in it to enhance easy trade, so we can keep up the rotterdam harbour and the steel production.

As I think about it, I'm not sure what the EU is about at all anymore. I get the monetary union and a possible future cooperative defense (and maybe external affairs) institution, but what the hell is all the other stuff about.
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Re: The world economic situation

Postby Aspman » Wed Oct 08, 2008 10:08 am

Kwiep wrote:I'm not quite sure what you're talking about with the arse covering this week.


The blanket guarantees on savings. This has the effect of drawing money into the banks of the countries offering the guarantees possibly starting a run on the banks in other countries without the guarantees.

Ireland was the first to do it and Merkel was quick to condemn Ireland for that, for destabilising the EU banking system. 1 week later she's doing the same thing.
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