Global Financial Crisis (1 Viewer)

[jb_nc]

because i have my addition table on my wall in front of me, my calculations appear to be correct so it looks like u learnt ur shit wrong.

lol u need a table for addition

 

[youBROKEmyLIFE]

Short selling has been banned. Good fucking job. Next they'll ban futures because they 'fuel speculation' and then ban currency because it's exploitative. Let the giant socialist experiment begin.

EDIT: Ruddkip, markets are not like alcohol, you can't deal with the fucking problem by attempting populist bullshit because you'll needlessly kneecap our financial abilities.

People ranting and raving about the great depression have no fucking clue what they're on about. US dollar's going to be worth less and less in the next few months so start hitting up US sites for MEGA SAYVINGS

 

[Crates]

Short selling has been banned. Good fucking job. Next they'll ban futures because they 'fuel speculation' and then ban currency because it's exploitative. Let the giant socialist experiment begin.

EDIT: Ruddkip, markets are not like alcohol, you can't deal with the fucking problem by attempting populist bullshit because you'll needlessly kneecap our financial abilities.

People ranting and raving about the great depression have no fucking clue what they're on about. US dollar's going to be worth less and less in the next few months so start hitting up US sites for MEGA SAYVINGS

i just bought a laptop from america. it was REALLY cheap.

 

[youBROKEmyLIFE]

From US news and world report

What would be the dollar cost of not bailing out Wall Street? Try a number north of $30 trillion. (The awful math is detailed below.) That's why Hank Paulson and Ben Bernanke were so scared last week. And, yes, I think "scared" isn't too strong a word. You don't think they convened an emergency nighttime meeting of congressional leaders and then walked out with something close to a blank check for a trillion bucks because they thought we were headed for an outright recession, even a fairly nasty one?

Nope, I think they believed, and got Congress to believe, that the economy was on the verge of something far worse than the worst downturn in a generation. And that is why they went with the so-called nuclear option: the biggest financial bailout in history. In the words of JPMorgan Chase economist James Glassman, "Thankfully, we and our friends around the world who are watching the economic lights come on will never know where events would have led, if the clock had not stopped [last] Thursday afternoon.... Last week's events made the 1987 stock market crash look like child's play."

As plumbers say about pricey repairs, "Sure, it costs money. It costs money because it saves you money." And plumber in chief Paulson had a pretty big pipe, loaded with toxic debt, to unclog.

OK, let's run the numbers. Paulson is asking for $700 billion. But that massive amount doesn't include previous government actions to cure the credit crisis (like propping up Fannie Mae and Freddie Mac), nor does it take into account money the government may get back from selling the bad assets it will be purchasing. So let's say those situations cancel each other out, and we are really talking about $700 billion. Now that money is being borrowed. So you take $700 billion borrowed for 30 years at prevailing interest rates, and you are talking about $2.5 trillion. But as Paulson said last week, "I am convinced that this bold approach will cost American families far less than the alternative: a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion."

Now let's do the math on the "alternatives." What would doing nothing cost?

1) Scenario 1: Great Depression "Lite." This is supposed to be the worst financial crisis since the 1930s. So let's assume that the total freezing up of American and global credit markets caused something half as bad as the Great Depression. From 1930 through 1933, the U.S. economy shrank by about 25 percent. Now let's say that by doing nothing and letting Mr. Market do his worst, the $12 trillion U.S. economy shrinks by half that amount (12.5 percent), or around $1.5 trillion over four years. (Also, figure a near doubling in unemployment.) But there's also the opportunity cost of not returning to growth, even at a so-so 2.0 percent a year. Doing nothing costs $1.1 trillion more in lost growth. So now we are down $2.6 trillion.

But wait: There's more. Let's assume the stock market drops an additional 25 percent or so. That's $3 trillion more in lost market capitalization. Plus, we are forgoing the opportunity to gain back what we have lost in the market, about $3 trillion. So, add the $6 million in lost market capitalization to the lost economic output, and we are at $8.6 trillion.

Then there is housing, already down $5 trillion, or roughly 20 percent. Let's conservatively say that we lose another $5 trillion by doing nothing. Plus, we forgo a partial rebound, say, $2.5 trillion. Adding together further housing losses (plus the lost opportunity to recoup some losses), and we are talking about a total cost of doing nothing of $15 trillion in four years for the whole megillah. But it could be worse.

2) Scenario 2: Great Depression 2.0. The economy shrinks by 25 percent over four years, or $3.2 trillion, plus $1.1 trillion in lost opportunity growth. Economic cost: $4.3 trillion. The market falls two thirds from its peak, losing $7 trillion in value from its current level, plus $3 trillion from not getting a rebound. Stock market cost: $10 trillion. Housing falls an additional $10 trillion from current levels, plus the lost opportunity of $2.5 trillion from a rebound. Housing cost: $12.5 trillion. Total four-year financial and economic cost of doing nothing: $26.8 trillion.

Now this is all a very rough guesstimate and doesn't include the costs of all sorts of other ramifications. Here is a fun one: the dissolution of China. Its economy is built for hypergrowth. A dramatically rising standard of living is both keeping the Communist Party in power and keeping the country together. Neither might survive a global economic meltdown. What is the economic impact of that? I don't know. My guesstimator just blew up.

Bottom line: Lots of folks have problems with the bailout. Liberals don't like a government bailout of Wall Street (instead of more homeowner help). Conservatives don't like a government bailout of Wall Street (vs. letting the market have its way). In a commentary on the National Review website, Newt Gingrich shows great skepticism toward the Mother of All Bailouts, advising that Congress "had better ask a lot of questions before it shifts this much burden to the taxpayer and shifts this much power to a Washington bureaucracy." He also presents several other actions government could take: 1) suspend the mark-to-market accounting rule; 2) repeal the Sarbanes-Oxley law; 3) eliminate the capital-gains tax; 4) undertake an "all of the above" energy plan to keep at home $500 billion of the $700 billion we currently send overseas for imported energy.

Count me as "all of the above" for Gingrich's ideas. (Toss in a corporate tax cut while you're at it.) But what would have been a smart, free-market plan in August 2007 or March of this year isn't enough for right now. Just as government created the environment for the credit crisis, it failed to enact quick solutions. The situation has gone critical. It's time for shock and awe.

http://www.usnews.com/blogs/capital-commerce/2008/9/22/bailout-prevents-great-depression-20.html

It's fairly reasoned.

 

[katie tully]

don't ban futures

the wool marketing company i worked for introduced futures about 2 years ago, it accounts for a big chunk of their business...

 

[katie tully]

Question. I don't know anything about finance or whatever, it's pretty much beyond my comprehension..

But if the American government was flat broke (apparently), where did it get the money to bail out those guys last week? And are there any consequences to the government emptying the coffers?

 

[youBROKEmyLIFE]

Question. I don't know anything about finance or whatever, it's pretty much beyond my comprehension..

But if the American government was flat broke (apparently), where did it get the money to bail out those guys last week? And are there any consequences to the government emptying the coffers?

http://en.wikipedia.org/wiki/Fiat_currency

They created it out of thin fuckin' air and thus devalue all of the dollars in circulation. Inflation is your money losing value; it's a pure product of fiat currencies.

Our current monetary system is so fucking retarded because it's all based on magic and us assuming our money has value. Absolutely retarded.

EDIT: Oh, and who were the motherfuckers that kept interest rates artificially low for fuckin forever in the early 00's? Oh yeah, the federal reserve under Greenspan. GG

 

[katie tully]

Ok second question, has this set a precedent for other companies looking to be bailed out?

Humour me, as I said, finance really isn't something I know a lot about.

 

[youBROKEmyLIFE]

Ok second question, has this set a precedent for other companies looking to be bailed out?

Humour me, as I said, finance really isn't something I know a lot about.

They didn't bail out Lehman bros because it wasn't that integral. They should have let a great deal of them fall because it is all bad fucking debt. People will expect the government to come save them again. This is all caused because of the stupid fucking McMansion buying Americans who fucking piled debt on themselves because they thought bricks and mortar = super free moneys.

Hell of speds.

OBLIGATORY RON PAULESQUE INSANE CONSPIRACY THEORY VIDEO:
http://www.youtube.com/watch?v=vnfeBKa4FjE

 

[youBROKEmyLIFE]

Gold at 2k an ounce has me hell of Lollin. Put your super into gold guys, kth0x.

 

[youBROKEmyLIFE]

Boom, Oil's up to $120USD a barrel. Ohlol.

EDIT: I'd short the US DOLLAR BUT I'D FUCKIN NOT BE ALLOWED TO (ALSO THIS SITUATION IS IMPROPER)

 

[katie tully]

O. IC.

I do lol at ACA when they have these blue collar workers on a joint income of $70,000 taking out $400,000 mortgages to buy their McMansions, then they have to get the latest Holden, and then the credit card to buy their plasma tvs. And then interest rates rise and they didn't budget for interest rate rises and can't afford the extra $50 a month or whatever to cover the mortgage and poor them, it's the banks fault for lending them the money.

 

[squiresshane990]

fuck off as if you wouldn't do it too if you only had a year 10 education and $70k

 

[katie tully]

fuck off as if you wouldn't do it too if you only had a year 10 education and $70k

check out mi sweet hsv bro, i mortgaged the missus and the kids for it

 

[youBROKEmyLIFE]

Holy fuck there are now artards all over the internet claiming that this is a 'great move for the US government because it means the government can make a profit'.

Hahahahahahhhahahahahahahahhahahahahah

 

[Nebuchanezzar]

These bailout packages make me so happy!

Hank Paulson has got to be kidding. He wants American taxpayers to hand a cool $US700 billion ($840 billion) to his pals on Wall Street in return for a gigantic bundle of their delinquent assets ... without his pals taking a pay cut.

Could there be a finer reward for failure? Could there be a worse deal for taxpayers?

No stake in the upside, no ceiling on extortionate Wall Street salaries, no guarantee the system will be stabilised. Just the mother of all rip-offs: a deal to privatise Wall Street's profits and socialise its losses.

How about this bit: "Decisions by the (Treasury) Secretary (Paulson) pursuant to the Authority of this Act are non-reviewable and committed to Agency discretion, and may not be reviewed by any court of law or any administrative agency''.

Paulson and his pals get an explicit protection against any review by the courts and Congress while taxpayers fork out top dollar for rubbish the banks can't sell. It is the quintessential dudding.

If the Paulson "cash for trash'' plan could avert systemic failure and this is by no means assured - it could have legs but Congress is jacking up at the ample "trust me'' element. And rightly so.

There is no reason to trust Wall Street, or the regulators. As House Democratic Speaker Nancy Pelosi put it, Congress would not "simply hand over a $US700 billion blank cheque to Wall Street and hope for a better outcome."

Until now Americans have been mostly apathetic when it came to the excesses of their investment banks. But now that Main Street is being asked to bail out Wall Street, again, and in huge measure, the temperature is rising.

Congress wants a brake on salaries, some kind of guarantee that Paulson's pals won't simply load up the truck with billions in bonuses again, this time funded by Ma and Pa Kettle.

The four biggest investment banks on Wall Street, which included Bear Stearns and Lehman Brothers, shelled out $US30 billion in bonuses last year. Lehman just went under and Bear Stearns was bailed out earlier in the year.

While pushing through his emergency deal, Paulson says he wants to defer the debate on salaries. Someone should take him aside and tell him, "Pal, it's over''. The moral and philosophical underpinning for $US50 million salaries is gone, let alone $US10 million salaries care of government.

These remuneration structures were struck on the basis of a compact with the market, that is that pay is "at risk'' and should reflect performance. That compact is finished. What is the risk if the losses are nationalised?

And what is the performance? The fancy deals and the structured finance rubbish brewed up by this crew gave the world CDOs, CDOs squared and cubed, RMBS, CLOs, ABS, CDS and all manner of noxious excuses for a fee.

From the sub-prime to the ridiculous, this orgy of leverage on leverage mimicked in financial centres as far afield as Australia has whipped the world to the edge of recession and destroyed faith in the entire system.

And now here is another $US1 trillion ($US700 billion is just for starters) to add to Bush's $US9.6 trillion national debt. Where will the money come from? The issue of Treasury bonds. Who will buy them?

Good question. Anyone for some bonds in an entity which can't pay off its debt but has just taken a trillion dollars worth of delinquent assets on its balance sheet?

The US dollar has been sinking thanks to the daunting prospect of a bond market deluged with bits of paper nobody wants: more US Government debt. The more paper on issue the lower the price.

Either the US defaults on its obligations an outcome many regard as "unthinkable'' or taxes will have to go up. Higher taxes, deeper recession. Thanks Wall Street.

All this makes it critical that Paulson and his pals demonstrate to the world that they understand the jig is up. The world changes.

People and pay are central to this understanding. Industrialists or entrepreneurs with their own businesses can pay whatever they like but the failed managers of licensed institutions on corporate welfare can hardly expect a blank cheque from those they have blown up. The contract is finished. Wall Street has not fulfilled its obligations.

As Paulson tries to shove his plan through in the face of congressional opposition the rewards for failure have already shamed the principal of pay for performance.

Fannie Mae boss Daniel Mudd and his opposite number at Freddie Mac, Richard Syron, walked last month with $US9.43 million in retirement and pension benefits on their way out the door. Failed, sacked and showered with money as their two giant mortgage operations were nationalised.

Lehman Brothers chairman and CEO Richard Fuld picked up $US22 million for 2007, the year thousands of his staff found themselves on the street. He took $US35 million the year before.

Merrill Lynch boss John Thain took a $US200 million payout with two offsiders for less than a year's work. Merrill was so close to obsolescence it sold itself to Bank of America for $US50 billion in scrip few days ago just as Lehman was biting the dust.

Thain was given a $US15 million bonus for signing on. Two former Goldman Sachs executives hired by Thain may do even better. Head of global trading, Thomas Montag, has already received a $US39 million bonus since signing on in August. With stock options accelerated by the buyout, he could finish up with $US76 million.

The bank's head of strategy, Peter Kraus, was bestowed with a $US95 million package just to beat what he was on at Goldman.

Paulson himself has shares in Goldman whose value was estimated at $US700 million. He is a direct beneficiary of his own bail-out proposal blind trust or no blind trust.

On the positive news front, the former head of broken insurance company AIG, Robert Willumstad, voluntarily forfeited a $US22 million severance package after he was giving his marching orders. He was only appointed in June.

"I prefer not to receive severance while shareholders and employees have lost considerable value in their AIG shares," wrote Willumstad in an email to his successor Edward Liddy.

Goldman boss Lloyd Blanfein took home $US54 million last year and Morgan Stanley's John Mack $US42 million.

The list goes on. Some of the investment bank's hedge funds clients have even been paying themselves more than $US1 billion.

Regulatory oversight and the ramifications of Bush's tax-cuts-for-the-rich policy alongside his catastrophic jaunt in Iraq have come home to roost.

On top of its $US9.6 trillion national debt, America is heading for its first $US1 trillion deficit this year. Paulson's bailout will add another $US1 trillion to the bill.

America is in trouble.

Disgraceful. Capitalism yay!

 

[squiresshane990]

Fuck off katie you loved living in a town with 300 people. The schools are the best out there...Man you're not remote until you live in a town with a population that is majority coon, no matter how good it is, they rape it somehow. And by rape it i mean drink all day in the park and coon knife whiteys and bum smokes then go home to rape their kids. Other then that i'd say remote is like once you get west of nyngan or hay.

Edit: way to delete half a days postings

 

[katie tully]

hay is like, south east though isnt it?

id say anything west of griffith is remote?

and yeah, sif delete postings.

 

[squiresshane990]

Hay is like another fuckload past rankins springs on the same road. like 180km. also like 2hrs west of griffith and directly west of here. yes anything west of griffith is bad. griffith is bad. drugs and wogs, coons and lebs, yeah good mix in that town haha.

 

[youBROKEmyLIFE]

These bailout packages make me so happy!



Disgraceful. Capitalism yay!

Last I heard government intervention in the markets was known as Socialism. YAY!